Answered

Determine the amount of an investment if $100 is invested at an interest
rate of 5% compounded monthly for 5 years. Round your answer to the
nearest whole dollar. *

Answer :

qop

Answer:

$128.34

Step-by-step explanation:

We will use the compound interest formula to solve this problem:

[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, lets change 5% into its decimal form:

5% -> [tex]\frac{5}{100}[/tex] -> 0.05

Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:

[tex]A=100(1+\frac{0.05}{12})^{12(5)}[/tex]

[tex]A=128.34[/tex]

The amount of the investment after 5 years would be $128.34

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