To calculate the earnings on a deposit, you 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 (initial deposit)
r = the annual interest rate as a decimal (3.3% = 0.033)
n = the number of times that interest is compounded per year (monthly = 12)
t = the number of years the money is invested for (in this case, 1 year)
Plugging in the values:
A = 5600(1 + 0.033/12)^(12*1)
Simplifying:
A = 5600(1 + 0.00275)^12
Calculating:
A ≈ 5600(1.00275)^12
A ≈ 5600(1.03384)
A ≈ 5788.77
So, after one year, the deposit would earn approximately $5788.77 in interest.
5600 deposit earnings 3.3% compounded monthly, after one year.
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