If Ashley deposits $10,500 into a savings account that earns 2.7% interest per year compounded monthly, how much money can she expect to be in the account in 3 years? Round your answer to two decimal places.

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where P is the principal amount ($10,500), r is the annual interest rate (0.027), n is the number of times interest is compounded per year (12), and t is the number of years (3). Plugging in these values gives A = 10500(1 + 0.027/12)^(12*3) = $11,384.86.

If Ashley Deposits $10,500 into a Savings Account That Earns