Question

ernest opened a savings account and deposited $2,622.00 as principal. the account earns 5% interest, compounded monthly. what is the balance after 5 years?
use the formula $a = p\left(1 + \frac{r}{n}\
ight)^{nt}$, where $a$ is the balance (final amount), $p$ is the principal (starting amount), $r$ is the interest rate expressed as a decimal, $n$ is the number of times per year that the interest is compounded, and $t$ is the time in years.
round your answer to the nearest cent.
$\square$

Explanation:

Step1: Identify given values

$P = 2622.00$, $r = 0.05$, $n = 12$, $t = 5$

Step2: Calculate $\frac{r}{n}$

$\frac{0.05}{12} \approx 0.0041667$

Step3: Calculate $1+\frac{r}{n}$

$1 + 0.0041667 = 1.0041667$

Step4: Calculate $nt$

$12 \times 5 = 60$

Step5: Calculate $(1+\frac{r}{n})^{nt}$

$1.0041667^{60} \approx 1.283358679$

Step6: Calculate final amount $A$

$A = 2622.00 \times 1.283358679$

Answer:

$3365.97$