Mackenzie opened a savings account and deposited 7,000.00 as principal. The account earns 12% interest, compounded monthly. What is the balance after 2 years?

Solution

Mackenzie opened a savings account and deposited 7, 000.00 as principal. The account earns 12% interest, compounded monthly. What is the balance after 2 years?

Solution

Amount : 8888.14

Solution steps

Translate the problem into an equation:

A = 7000 (1 + \frac{0.12}{12})^{12 \cdot 2}

7000 (1 + \frac{0.12}{12})^{12 \cdot 2} = 8888.14253 \dots

Round to the nearest hundredth:

8888.14

Amount : 8888.14

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