Suppose you found a CD that pays 2,9% interest compounded monthly for 4 years,
If you deposit $12,000 now, how much will you have in the account in 4 years? (Round to the nearest cent.)


To calculate the future value of an investment with compound interest, you can use the formula:

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

Where:
- $A$ is the amount of money you'll have in the account after interest.
- $P$ is the principal amount (initial deposit), which is \$12,000.
- $r$ is the annual interest rate (as a decimal), which is 2.9% or 0.029.
- $n$ is the number of times the interest is compounded per year (monthly compounding means $n = 12$).
- $t$ is the number of years, which is 4.

Let's calculate it step by step:

\[
A = 12,000 \left(1 + \frac{0.029}{12}\right)^{12 \times 4}
\]

I'll compute this for you.After 4 years, with a 2.9% interest rate compounded monthly, your investment of $12,000 will grow to **$13,474.06**.

Would you like more details or have any questions about this calculation?

Here are some related questions to explore further:
1. What would the future value be if the interest rate were 3.5% instead of 2.9%?
2. How much total interest would you earn from this investment?
3. How does monthly compounding compare to annual compounding in terms of final value?
4. What would happen if the compounding period was quarterly instead of monthly?
5. How can I determine how long it would take to double my money at the same interest rate?

**Tip**: When dealing with compound interest, the frequency of compounding has a significant impact on how quickly your investment grows.

Suppose you found a CD that pays 2.9% interest compounded monthly for 4 years. If you deposit $12,000 now, how much will you have in the account in 4 years? (Round to the nearest cent.)

Learn how to calculate compound interest on a CD with a 2.9% interest rate compounded monthly over 4 years. Using the formula A = P(1 + r/n)^(nt), discover how a $12,000 deposit grows to $13,474.06 after 4 years. Ideal for students in Grades 9-12 learning about exponential growth and compound interest.

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