SOLUTION: another question for y'all suppose you invest $5000 into an interest-bearing account which compounds at 3% every month. How much will you have in your account at the end of 7 y

Algebra ->  Finance -> SOLUTION: another question for y'all suppose you invest $5000 into an interest-bearing account which compounds at 3% every month. How much will you have in your account at the end of 7 y      Log On


   

Question 237554: another question for y'all
suppose you invest $5000 into an interest-bearing account which compounds at 3% every month. How much will you have in your account at the end of 7 years? I have to use this formula>> S=P(1+r/n)nt-th power. please help and need back asap and if you could show the steps it would be greatly appreciated
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
A=p%281%2Br%2Fn%29%5E%28n%2At%29 Start with the compound interest formula


A=5000%281%2B0.03%2F12%29%5E%2812%2A7%29 Plug in p=5000, r=0.03 (this is the decimal form of 3% interest), n=12, and t=7


A=5000%281%2B0.0025%29%5E%2812%2A7%29 Divide 0.03 by 12 to get 0.0025


A=5000%281%2B0.0025%29%5E%2884%29 Multiply the exponents 12 and 7 to get 84


A=5000%281.0025%29%5E%2884%29 Add 1 and 0.0025 to get 1.0025


A=5000%281.23335480054924%29 Raise 1.0025 to the 84 th power to get 1.23335480054924


A=6166.77400274618 Multiply 5000 and 1.23335480054924 to get 6166.77400274618


So if you invest $5,000 at an interest rate of 3%, which is compounded 12 times a year for 7 years, the return is about $6,166.77 (which is rounded to the nearest cent)