Answer:
a. $5,287.30
b. 5.75%
Explanation:
We were given that:
Rate = 5.6% = 5.6/100 = 0.056
Compounding, n = 12
Principal, P = $5,000
a) After 1 year, Joseph has:
[tex]\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ t=1\text{ year} \\ A=5000(1+\frac{0.056}{12})^{12*1} \\ A=5000(1.0574599283787860435748137710923) \\ A=5287.2996\approx5287.30 \\ A=\text{\$}5287.30 \end{gathered}[/tex]
b) The APY is given by:
[tex]\begin{gathered} APR=(1+\frac{r}{n})^n-1 \\ APR=(1+\frac{0.056}{12})^{12}-1 \\ APR=1.05746-1 \\ APR=0.05746\approx5.746\approx5.75 \\ APR=5.75\text{\%} \\ \end{gathered}[/tex]
