Find the balance in the account after the given period.

Question

$ 2 comma 500 deposit earning 3.3 % compounded​ monthly, after 4 years.
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Part 1
The balance after 4 years will be ​$
  
​ (Round to the nearest cent as​ needed.)

Answer 1

To calculate the balance after 4 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = the final amount
P = the principal amount (initial deposit)
r = the annual interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the number of years

Given:
P = $2,500
r = 0.033 (3.3% expressed as a decimal)
n = 12 (compounded monthly)
t = 4 years

Plugging in these values into the formula, we get:
A = 2500(1 + 0.033/12)^(12*4)

Calculating this expression, we find the balance after 4 years to be approximately $2,839.54.