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You deposit $5,500 into a saving account that pays an annual interest rate of 5.5% compounded monthly.

How much would you have after 10 years?

Sagot :

Space

Answer:

$9520.92

General Formulas and Concepts:

Pre-Algebra

Order of Operations: BPEMDAS

  1. Brackets
  2. Parenthesis
  3. Exponents
  4. Multiplication
  5. Division
  6. Addition
  7. Subtraction
  • Left to Right

Algebra I

Compounded Interest Rate Formula: [tex]\displaystyle A = P(1 + \frac{r}{n})^{nt}[/tex]

  • P is principle amount
  • r is rate
  • n is compounded rate
  • t is time

Step-by-step explanation:

Step 1: Define

Identify variables

P = 5500

r = 5.5% = 0.055

n = 12

t = 10

Step 2: Find A

  1. Substitute in variables [Compounded Interest Rate Formula]:                     [tex]\displaystyle A = 5500(1 + \frac{0.055}{12})^{12(10)}[/tex]
  2. (Parenthesis) Divide:                                                                                         [tex]\displaystyle A = 5500(1 + 0.004583)^{12(10)}[/tex]
  3. (Parenthesis) Add:                                                                                            [tex]\displaystyle A = 5500(1.004583)^{12(10)}[/tex]
  4. [Exponents] Multiply:                                                                                        [tex]\displaystyle A = 5500(1.004583)^{120}[/tex]
  5. Evaluate exponents:                                                                                         [tex]\displaystyle A = 5500(1.73108)[/tex]
  6. Multiply:                                                                                                             [tex]\displaystyle A = 9520.92[/tex]
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