Angela deposits $4500 into an account with an APR of 3.4% for 7 years. Find the future value of the account if interest is compounded monthly. Round your answer to the nearest hundredth, if necessary.
To find the future value of the account, we can use the formula for compound interest:
FV = P(1 + r/n)^(nt)
Where:
FV = Future Value
P = Principal amount (initial deposit) = $4500
r = Annual interest rate = 3.4% = 0.034
n = Number of times interest is compounded per year = 12 (monthly)
t = Number of years = 7
Plugging in the values, we get:
FV = $4500(1 + 0.034/12)^(12*7)
FV = $4500(1 + 0.002833)^84
FV = $4500(1.002833)^84
FV = $4500(1.288155)
FV = $5796.70
Therefore, the future value of the account after 7 years with monthly compounding is $5796.70.