Phineas puts $800 into a certificate of deposit that earns 3.39%. If the money is compounded monthly, how much will it be worth in 3 years?

 

State your answer in terms of dollars, rounded to the nearest cent, but do not include a $ sign or the word "dollars" with your response.

 

The formula for compound interest is:

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

Where:
- $A$ is the amount of money after interest,
- $P$ is the principal amount ($800),
- $r$ is the annual interest rate (3.39% or 0.0339),
- $n$ is the number of times the interest is compounded per year (monthly means $n = 12$),
- $t$ is the time in years (3 years).

Substitute the given values:

\[
A = 800 \left(1 + \frac{0.0339}{12}\right)^{12 \times 3}
\]

Now, let's calculate this step by step.

The amount of money Phineas will have after 3 years, compounded monthly, is **885.51**.

Would you like any additional details or have any questions?

Here are 5 related questions:
1. What would the balance be if the interest rate was 5% instead?
2. How much interest did Phineas earn in 3 years?
3. What if the money was compounded quarterly instead of monthly?
4. How long would it take to double the investment at 3.39% compounded monthly?
5. What is the formula for continuously compounded interest?

**Tip:** Always double-check whether the interest is compounded annually, monthly, or daily—this affects the growth significantly!

Phineas puts $800 into a certificate of deposit that earns 3.39%. If the money is compounded monthly, how much will it be worth in 3 years? State your answer in terms of dollars, rounded to the nearest cent, but do not include a $ sign or the word 'dollars' with your response.

Learn how to calculate the future value of a $800 deposit with a 3.39% annual interest rate compounded monthly over 3 years. This problem demonstrates the use of the compound interest formula and is ideal for students in Grades 9-12.

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