SOLUTION: How much would $500 invested at 6% interest compounded monthly be worth after 5 years? Round your answer to the nearest cent. Do not include units in your answer.

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Question 697176: How much would $500 invested at 6% interest compounded monthly be worth after 5 years? Round your answer to the nearest cent. Do not include units in your answer.
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=500%281%2B0.06%2F12%29%5E%2812%2A5%29 Plug in P=500, r=0.06 (the decimal equivalent of 6%), n=12 and t=5.


A=500%281%2B0.005%29%5E%2812%2A5%29 Evaluate 0.06%2F12 to get 0.005


A=500%281.005%29%5E%2812%2A5%29 Add 1 to 0.005 to get 1.005


A=500%281.005%29%5E%2860%29 Multiply 12 and 5 to get 60.


A=500%281.34885015254931%29 Evaluate %281.005%29%5E%2860%29 to get 1.34885015254931.


A=674.425076274654 Multiply 500 and 1.34885015254931 to get 674.425076274654.


A=674.43 Round to the nearest hundredth (ie to the nearest penny).


So the answer is 674.43