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Popular Word Problems >

You deposit 300 dollars in an account that pays 3.9 percent interest and keep it there for 5 years. Find the balance of the account when the interest is compounded monthly

Solution

Y o u d e p os i t 300 d o ll a rs in an a cco u n t t ha t p a ys 3.9 p erce n t in t eres t an d k ee p i t t h ere f or 5 ye a rs . F in d t h e ba l an ce o f t h e a cco u n t w h e n t h e in t eres t i s co m p o u n d e d m o n t h l y

Solution

Amount : 364.48

Solution steps

Translate the problem into an equation:

A = 300 (1 + \frac{0.039}{12})^{12 \cdot 5}

300 (1 + \frac{0.039}{12})^{12 \cdot 5} = 364.47803 \dots

Round to the nearest hundredth:

364.48

Amount : 364.48

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