Warren puts 8,000.00 into an account to use for school expenses. The account earns 1% interest, compounded monthly. How much will be in the account after 5 years?

Solution

Warren puts 8, 000.00 into an account to use for school expenses. The account earns 1% interest, compounded monthly. How much will be in the account after 5 years?

Solution

Amount : 8409.99

Solution steps

Translate the problem into an equation:

A = 8000 (1 + \frac{0.01}{12})^{12 \cdot 5}

8000 (1 + \frac{0.01}{12})^{12 \cdot 5} = 8409.99365 \dots

Round to the nearest hundredth:

8409.99

Amount : 8409.99

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