SOLUTION: $2000 is deposited in an account that pays 8% annual interest compounded monthly. What is the balance in five years?

Question 709996: $2000 is deposited in an account that pays 8% annual interest compounded monthly. What is the balance in five years?

Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!

Start with the compound interest formula

Plug in , (the decimal equivalent of 8%), and .

Evaluate to get

Add to to get

Multiply and to get .

Evaluate to get .

Multiply and to get .

Round to the nearest hundredth (ie to the nearest penny).

So the balance will be $2,979.69 in five years.
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