Lucy puts 500.00 into an account to use for school expenses. The account earns 5% interest, compounded monthly. How much will be in the account after 6 years?

Solution

Solution

Amount : 674.51

Solution steps

Translate the problem into an equation:

A = 500 (1 + \frac{0.05}{12})^{12 \cdot 6}

500 (1 + \frac{0.05}{12})^{12 \cdot 6} = 674.50887 \dots

Round to the nearest hundredth:

674.51

Amount : 674.51

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