Question 215113
First, since this balance is compounded monthly, the value of 'n' is {{{n=12}}} (not 365) since 'n' is the <font color=red>n</font>umber of times the balance is compounded annually.



{{{A=P(1+r/n)^(n*t)}}} Start with the compound interest formula



{{{A=6000(1+0.056/12)^(12*3)}}} Plug in {{{P=6000}}} (initial investment), {{{r=0.056}}} (this is the decimal form of 5.6% interest), {{{n=12}}}, and {{{t=3}}} (3 years)



{{{A=6000(1+0.00466667)^(12*3)}}} Divide 0.056 by 12 to get 0.00466667



{{{A=6000(1+0.00466667)^(36)}}} Multiply the exponents 12 and 3 to get 36



{{{A=6000(1.00466667)^(36)}}} Add 1 and 0.00466667 to get 1.00466667



{{{A=6000(1.1824746)}}} Raise 1.00466667 to the 36 th power to get 1.1824746



{{{A=7094.8476}}} Multiply 6000 and 1.182474 to get 7094.8476



{{{A=7094.85}}} Round to the nearest cent.




So if you invest $6,000 at an interest rate of 5.6%, which is compounded 12 times a year for 3 years,  the return is about $7,094.85 (which is rounded to the nearest cent)