Intermediate Algebra (6th Edition)

Published by Pearson
ISBN 10: 0321785045
ISBN 13: 978-0-32178-504-6

Chapter 2 - Section 2.3 - Formulas and Problem Solving - Exercise Set: 27c


7325.98 dollars

Work Step by Step

We are given that a principal of 6000 dollars is invested in an accounting paying an annual percentage rate of 4%. Also, we know that the account is compounded monthly (or 12 times per year). We can calculate the amount in the account in 5 years by using the formula $A=P(1+\frac{r}{n})^{nt}$. A= amount in the account after t years P= principal or amount invested t= time in years r= annual rate of interest n= number of times compounded per year $A=6000\times(1+\frac{.04}{12})^{12\times5}=6000\times(1+\frac{.04}{12})^{60}=7325.98$ dollars
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