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25 June, 06:46

Nancy has $4,111 in an account that pays 3.07% interest compounded monthly. What is her

ending balance after two years?

M

17

.

+1
Answers (1)
  1. 25 June, 07:45
    0
    Ending balance after 2 years=$4,370.98

    Step-by-step explanation:

    To calculate her ending balance after two years, we need to get the express the total amount as follows;

    A=P (1+r/n) ^nt

    where;

    A=Total future value of the initial investment

    P=Initial value of the investment

    r=Annual interest rate

    n=number times the interest rate is compounded annually

    t=number of years of the investment

    In our case;

    P=$4,111

    r=3.07%=3.07/100=0.0307

    n=12

    t=2 years

    Replacing;

    A=4,111 (1+0.0307/12) ^ (12*2)

    A=4,111 (1.0026) ^24

    A=4,370.98

    Ending balance after 2 years=$4,370.98
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