To calculate the amount in the account after 10 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount in the account
P = the initial deposit
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of years
In this case:
P = $3000
r = 5% = 0.05
n = 12 (compounded monthly)
t = 10 years
Substituting these values into the formula:
A = 3000(1 + 0.05/12)^(12*10)
Simplifying:
A = 3000(1.0041667)^(120)
A ≈ 3000(1.6487212707)
Calculating:
A ≈ $3000 * 1.6487212707
A ≈ $4946.16
Therefore, you will have approximately $4946.16 in the account after 10 years.
You deposit $3000 in an account earning 5% interest compounded monthly. How much will you have in the account in 10 years?
1 answer