Angela deposits 1000 into an account with an APR of 3.1% for 10 years. Find the future value of the account if interest is compounded monthly. Round your answer to the nearest hundredth, if necessary.

Solution

A n g e l a d e p os i t s 1000 in t o an a cco u n t w i t h an A PR o f 3.1% f or 10 ye a rs . F in d t h e f u t u re v a l u e o f t h e a cco u n t i f in t eres t i s co m p o u n d e d m o n t h l y . R o u n d yo u r an s w er t o t h e n e a res t h u n d re d t h, i f n ecess a ry .

Amount : 1362.88

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.031}{12})^{12 \cdot 10}

1000 (1 + \frac{0.031}{12})^{12 \cdot 10} = 1362.88022 \dots

Round to the nearest hundredth:

1362.88

Amount : 1362.88