$10,000 is deposited in a money market account when interest is compounded every month at an annual rate of 6%. Find the total amount accumulated at the end of 5 years. Round your answer to the nearest cent.
A)$13,289.59
B) $33,000.00
C) $13,488.50
D) $11,489.08
E) None of these

Question

$10,000 is deposited in a money market account when interest is compounded every month at an annual rate of 6%. Find the total amount accumulated at the end of 5 years. Round your answer to the nearest cent. ​
A)$13,289.59
B) $33,000.00
C) $13,488.50
D) $11,489.08
E) None of these

Quizplus · Accepted Answer

The formula for compound interest is:

A = P(1 + r/n)^(nt)

Where:

A = the total amount accumulated 
P = the principal amount 
r = the annual interest rate (as a decimal) 
n = the number of times the interest is compounded per year 
t = the time period in years

Using this formula, the total amount accumulated after 5 years is:

A = 10000(1 + 0.06/12)^(12*5) 
A = 10000(1.005)^60 
A = $13,488.50

Therefore, the best choice is C.

$10,000 Is Deposited in a Money Market Account When Interest