SOLUTION: $2,000 is deposited into an account that pays 8% annual interest, compounded monthly. What is the Balance after 5 years? How much money must you deposit into an account that pay

Question 273367: $2,000 is deposited into an account that pays 8% annual interest, compounded monthly. What is the Balance after 5 years?
How much money must you deposit into an account that pays 6.25% interest coupounded annually, to have a balance of 700$ after 2 years?

What is the formula to solve this. In my book its under Real World Applications.
Answer by checkley77(12844) (Show Source): You can put this solution on YOUR website!
2,000(1+.08/12)^5*12
2,000(1+.006667)^60
2,000*1.006667)^60
2,000*1.49=$2,979.75 ans.
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x(1+.0625)^2=700
x(1.0625)^2=700
x*1.1289=700
x=700/1.1289
x=620 ans. for the smount invested.
Proof:
620(1.0625)^2=700
620*1.1289=700
700~700
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This equation is for the "annual" compound interest.
p=(1+r)^t p=principle, r=tax rate, t= number of years.
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This formula is for compounded interest for "n periods per year" which is what I used in the first problem.
"the formula my book gave me was A=p(1+r/n)^nt"

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