Find the balance in the account after the given period.

Question

$ 4,700 deposit earning 3.9 % compounded​ monthly, after 3 years.

Answer 1

To find the balance in the account after 3 years, we can use the formula for compound interest:

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

where:
A = the future balance
P = the principal amount deposited
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years

In this case, P = $4,700, r = 0.039 (3.9% expressed as a decimal), n = 12 (monthly compounding), and t = 3 years.

Substituting the values into the formula, we have:

A = 4700(1 + 0.039/12)^(12*3)

Simplifying the equation inside the parentheses:

A = 4700(1 + 0.00325)^(36)

A = 4700(1.00325)^(36)

Using a calculator, we can find that (1.00325)^36 ≈ 1.122887

So the balance in the account after 3 years is:

A ≈ $4,700 * 1.122887

A ≈ $5,279.79

Therefore, the balance in the account after the given period is approximately $5,279.79.