Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:$500 is invested in an account each month. If the account pays 5% interest rate, compounded
monthly, what is the account balance after 3 years? Show work.
Expert Solution
Step 1
Compound interest is used to calculate loan or deposited amount.
Given that,
Starting amount is $500.00
Time = 3 years.
Additional contributions is $500.00 per month
Rate of return 5% compounded monthly
Total amount you will have contributed $18,000.00
Total at end of investment is $19455
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