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Popular Word Problems >

8000 are invested in a bank account at an interest rate of 6 percent per year. Find the amount in the bank after 12 years if interest is compounded monthly.

Solution

8000 a re in v es t e d in a bank a cco u n t a t an in t eres t r a t e o f 6 p erce n t p er ye a r . F in d t h e am o u n t in t h e bank a f t er 12 ye a rs i f in t eres t i s co m p o u n d e d m o n t h l y .

Solution

Amount : 16406.01

Solution steps

Translate the problem into an equation:

A = 8000 (1 + \frac{0.06}{12})^{12 \cdot 12}

8000 (1 + \frac{0.06}{12})^{12 \cdot 12} = 16406.00652 \dots

Round to the nearest hundredth:

16406.01

Amount : 16406.01

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