You invest $8500 in a savings account that pays interest of 4.8% compounded monthly. What is the value of your account after 19 months?
A) $9169.79
B) $9669.79
C) $9119.79
D) $9219.79
E) $9999.79

Question

Quizplus · Accepted Answer

Using the formula A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the interest rate, n is the number of times the interest is compounded per year, and t is the time in years:

n = 12 (compounded monthly)
r = 0.048 (4.8% expressed as a decimal)
P = 8500
t = 19/12 (19 months expressed in years)

A = 8500(1 + 0.048/12)^(12*(19/12))
A = 9169.79

Therefore, the value of the account after 19 months is $9169.79, which corresponds to choice A.

You Invest $8500 in a Savings Account That Pays Interest