The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. Answer parts​ (a) and​ (b).
Principal
Rate
Compounded
Time
$ 8000
1.5 %
monthly
5 years
LOADING... Click the icon to view some finance formulas.
Question content area bottom
Part 1
a. Find how much money there will be in the account after the given number of years.
The amount of money in the account after 5 years is ​$
  
enter your response here.
​(Round to the nearest hundredth as​ needed.)

The formula for compound interest is given by:

\[
A = P \left(1 + \frac{r}{n}\right)^{nt}
\]

Where:
- $ A $ is the amount of money in the account after time $ t $,
- $ P $ is the principal (initial deposit),
- $ r $ is the annual interest rate (as a decimal),
- $ n $ is the number of times the interest is compounded per year,
- $ t $ is the time in years.

Given:
- $ P = 8000 $,
- $ r = 1.5\% = 0.015 $,
- $ n = 12 $ (since it is compounded monthly),
- $ t = 5 $ years.

Now, substituting these values into the formula:

\[
A = 8000 \left(1 + \frac{0.015}{12}\right)^{12 \times 5}
\]

Let me calculate the value.The amount of money in the account after 5 years will be **$8,622.67**.

Would you like more details or have any questions? Here are 5 related questions for practice:

1. What would the balance be after 10 years with the same conditions?
2. How would the balance change if the interest rate was 2%?
3. What if the account compounded annually instead of monthly?
4. How does increasing the initial deposit affect the final amount?
5. Can you calculate the interest earned over 5 years?

**Tip:** The frequency of compounding (monthly, annually, etc.) significantly affects the growth of an investment over time.

The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. Answer parts (a) and (b).
Principal: $8000
Rate: 1.5%
Compounded: monthly
Time: 5 years
Part 1: a. Find how much money there will be in the account after the given number of years.

Learn how to calculate the future value of an $8000 deposit in a savings account with a 1.5% annual interest rate, compounded monthly for 5 years. This compound interest problem helps students understand exponential growth and financial formulas, suitable for Grades 9-12.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation