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Algebra 2

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How much money would you have in 4 years if you deposited $2500 in an account paying 5.5% annual interest, compounded monthly?

  • Algebra 2 -

    P = Po(1+r)^n.

    Po = $2500 = Initial deposit.

    r = (5.5%/12)/100% = 0.004583 = Monthly
    % rate expressed as a decimal.

    n = 12Comp/yr * 4yrs = 48 Compounding
    periods.

    Plug the above values into the given Eq and get:

    P = $3113.63.

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