Question

Ryder deposits $500 into an account that earns 4.5% per year. Determine the amount in
the account after 5 years if the interest is:
a) Simple Interest
b) Compounded Monthly

Answer 1

a) 500 + (500 * .045 * 5)

b) 500 * [1 + (.045 / 12)]^60

5 years is 60 monthly compoundings

Answer 2

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