If you deposit $3,750 in an account that pays 6% annual interest compounded monthly, what is the balance of the account after 11 years? I'm using y=a(1+r)^t , then i have y=3,750(1+.06)^132

e3r2a1cakCh7

e3r2a1cakCh7

Answered question

2022-11-28

If you deposit $3,750 in an account that pays 6% annual interest compounded monthly, what is the balance of the account after 11 years? I'm using y = a ( 1 + r ) t , then i have y = 3 , 750 ( 1 + .06 ) 132

Answer & Explanation

jockedripperHZT

jockedripperHZT

Beginner2022-11-29Added 13 answers

A better formula to use would be
y = a ( 1 + r k ) k t ,
where k is the number of times the interest is compounded per year. So, plugging in your information gives
y = 3750 ( 1 + .06 12 ) 132 = $ 7243.55

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