Answer :
Answer:
$5,983.40
Explanation:
Data provided in the question:
Principle amount = $5,000
Interest rate, r = 6% = 0.06
Time, t = 3 years
Compounded monthly i.e number of periods n = 12
Now,
Final amount = Principle × [tex]\left( 1 + \frac{r}{n} \right)^{\Large{n\times t}}[/tex]
or
Final amount = $5,000 × [tex]\left( 1 + \frac{0.06}{12} \right)^{\Large{12\times3}}[/tex]
or
Final amount = $5,000 × 1.005³⁶
or
Final amount = $5,000 × 1.196
or
Final amount = $5,983.40
The value of the account at the end of three years is closest to $5,983.40.
What is the value of the account at the end of three years?
When an account earns a compound interest monthly it means that the amount invested and the interest accured increases in value every month.
The formula for calculating future value:
FV = P (1 + r)^nm
- FV = Future value
- P = Present value
- R = interest rate = 6/12 = 0.5%
- m = number of compounding = 12
- N = number of years
$5000 x (1.005)^(3 x 12) = $5,983.40
(To learn more about future value, please check: https://brainly.com/question/18760477