Jenna invests in a savings account that has an annual interest rate of 12% compounded monthly. Jenna initially deposits $2673. How much money will Jenna have after 4 years?
P = Po(1+r)^t.
Po = $2873.
r = 0.12/12mo. = 0.01/mo.
t = 12mo/yr. * 4yts = 48 mo.
To calculate how much money Jenna will have after 4 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount Jenna will have after 4 years
P = the initial deposit amount ($2673)
r = the annual interest rate (12% or 0.12)
n = the number of times the interest is compounded per year (monthly, so 12)
t = the number of years (4)
Plugging in the values into the formula:
A = 2673(1 + 0.12/12)^(12 * 4)
Let's now solve this equation step by step:
1. First, calculate the value inside the parentheses:
1 + 0.12/12 = 1 + 0.01 = 1.01
2. Now raise 1.01 to the power of (12 * 4):
(1.01)^(12 * 4) ≈ 1.6289
3. Multiply this value by the initial deposit amount:
A = 2673 * 1.6289 ≈ $4343.02
Therefore, Jenna will have approximately $4343.02 after 4 years in her savings account.