Tracy is saving up money to buy a car. Tracy puts 5,000.00 into an account which earns 1% interest, compounded monthly. How much will she have in the account after 8 years?

Solution

Tracy is saving up money to buy a car. Tracy puts 5, 000.00 into an account which earns 1% interest, compounded monthly. How much will she have in the account after 8 years?

Solution

Amount : 5416.25

Solution steps

Translate the problem into an equation:

A = 5000 (1 + \frac{0.01}{12})^{12 \cdot 8}

5000 (1 + \frac{0.01}{12})^{12 \cdot 8} = 5416.25489 \dots

Round to the nearest hundredth:

5416.25

Amount : 5416.25

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