Problema Solution
arlan opens a savings account with a deposit of 3000. the account earns 3% annual interest, compounded monthly. how much money will he have in his account after 10 years, assuming he does not touch the money during that time frame?
Answer provided by our tutors
P = $3,000
r = 0.03 or 3% annual interest
t = 10 years
m = 12 compounding periods per year
A = the future value
A = P(1 + r/12)^(mt)
A = 3000(1 + 0.03/12)^(12*10)
A = $4,048.06
After 10 years Arlan will have $4,048.06 in his account.