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?
A=P(1+i)^n
A = 2673(1 + (.12/12)^(12x4)
Sub it into your calculator : )
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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 amount of money Jenna will have after the specified time period (in this case, 4 years)
P = the initial deposit or principal amount ($2673 in this case)
r = the annual interest rate (12% or 0.12 as a decimal)
n = the number of times per year that interest is compounded (monthly in this case, so n = 12)
t = the number of years
Plugging in the values into the formula, we have:
A = 2673(1 + 0.12/12)^(12*4)
Now, let's solve this equation step by step:
Step 1: Simplify the expression inside the parentheses:
0.12/12 = 0.01
Step 2: Calculate the exponent in the parentheses:
12 * 4 = 48
Step 3: Calculate the value inside the parentheses:
(1 + 0.01)^(48) ≈ 1.60103
Step 4: Calculate the final amount A:
A = 2673 * 1.60103 ≈ $4280.15
Therefore, after 4 years, Jenna will have approximately $4280.15 in her savings account.