Question

If you deposit $3000 in a savings account for six years, and your bank has an interest rate of 6.00% for the first $500 that was deposited and 0.10% for the remaining $2500. The interest rate is compounded monthly. What would the amount be in the account after six years?

Answer #1

Formula for the compound interest is A = P(1 + r/n)^(n)

A = future value of investment

P = principal investment amount

r =interest rate

n = number of times that interest is compound for period

For 1st $500,

For Remaining $2500.

Total amount after 6 years..= $2515.04+$716.02 = $3231.06

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