To calculate the amount of money in the savings account after 12 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested/borrowed for
In this case:
P = $5,600
r = 5.5% or 0.055 (decimal)
n = 1 (compounded annually)
t = 12 years
Plugging in the values, we get:
A = $5,600(1 + 0.055/1)^(1*12)
A = $5,600(1 + 0.055)^12
A = $5,600(1.055)^12
A = $5,600(1.92513)
A = $10,802.79
Therefore, the amount of money in the savings account after 12 years would be approximately $10,802.79.
5,600 is deposited into a savings account that earns 5.5% interest for 12 years
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