Question

Kellee deposits $5000 in a savings account with an interest rate of 0.9% compounded monthly. If she makes no further deposits and no withdraws, how much will be in the account in 3 years?

Answer 1

Given:

Kellee deposits $5000 in savings account with an interest rate of 0.9% compounded monthly.

So, P = 5000

interest rate = 0.9% = 0.009

compounded monthly, n = 12

We will find the money in the account after 3 years, t = 3

We will use the following formula:

$A=P\cdot(1+\frac{r}{n})^{nt}$

substitute with the given values:

$A=5000\cdot(1+\frac{0.009}{12})^{12\cdot3}\approx5136.787$

Rounding to the nearest cent

so, the answer will be: $5136.79