Suppose that you invest $5873 in an account that earns interest at an APR of 4.4%, compounded monthly. Determine the accumulated balance after 7 years.

Question

Alicia Reyes

Mathematics

3 May, 05:02

Suppose that you invest $5873 in an account that earns interest at an APR of 4.4%, compounded monthly. Determine the accumulated balance after 7 years.

+2

Answers (1)

Know the Answer?

Kennedi · Answer 1

Given:

P = $5873, the principal

r = 4.4% = 0.044, the interest rate

n = 12, twelve monthly compoundings in a year

t = 7 years

Note that

n*t = 12*7 = 84

r/n = 0.044/12 = 0.003667

The accumulated balance after 7 years is

A = 5873 * (1 + 0.003667) ⁸⁴ = $7,986.90

Answer: $7,986.90