Answered

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Ariana invested $400 in an account paying an interest rate of 3.8% compounded
monthly. Assuming no deposits or withdrawals are made, how much money, to the
nearest ten dollars, would be in the account after 11 years?

Sagot :

$54970

11 years = 132 months so the balance will compound 132 times.
Adding 3.8% is the same as multiplying by 1.038
400 x 1.038^132 = 54968.09

Of course the 3.8% interest per month is an effective rate of 56.4% per annum
Ariana should have invested a lot more at this amazing rate of interest.

A more reasonable question would have said the annual rate of 3.8% was compounding monthly
3.8% pa = 0.31666...% per month
400 x 1.0031667^132 = $607.17
Depending on the level of your course this answer makes more sense
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