A savings account earns an interest rate of 2.75% compounded monthly for an account with an initial deposit of 5, 000. How much money will be in the account after 8 years? Round your answer to the nearest hundredth.

Solution

Solution

Amount : 6228.82

Solution steps

Translate the problem into an equation:

A = 5000 (1 + \frac{0.0275}{12})^{12 \cdot 8}

5000 (1 + \frac{0.0275}{12})^{12 \cdot 8} = 6228.81566 \dots

Round to the nearest hundredth:

6228.82

Amount : 6228.82

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