Question

Rodrigo puts $815.00 into an account to use for school expenses. The account earns 7% interest, compounded monthly. How much will be in the account after 5 years?
Use the formula A=P1+
r
n
nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent

Answer 1

A = P (1 + r/n)^{nt} = 815(1 + 0.07/12)^{12·5} = 815(1.0058333333)^{60} ≈ 815(1.417625) ≈ $1,155.36.

So the account will have $1,155.36 after 5 years.