You deposit 4000 in an account earning 2 interest compounded

You deposit $4000 in an account earning 2% interest compounded monthly. How much will you have in the account in 5 years?

Solution

Answer : There will be $4420.32 in account in 5 years.

r = 2%

n = 12(compounded monthly so 12 times in a year)

t = 5

PV = $4000

FV = PV * (1+r/n)^n*t

FV = 4000 (1+0.02/12)^12*5

FV = 4000 * 1.10507892

FV = $4420.32