Answer:
Viktor will have $5,800 in his account after 5 years
Step-by-step explanation:
Compound Interest
It happens when interest in the next period is then earned on the principal sum plus previously accumulated interest.
The formula is:
[tex]\displaystyle A=P\left(1+{\frac {r}{n}}\right)^{nt}[/tex]
Where:
A = final amount
P = initial principal balance
r = interest rate
n = number of times interest applied per time period
t = number of time periods elapsed
Viktor deposits P=$4,300 in an account that earns r=6% interest compounded monthly. Since there are 12 months in a year, n=12. The interest rate is converted to decimal: r=6/100=0.06. The final amount in the account after t=5 years is:
[tex]\displaystyle A=\$4,300\left(1+{\frac {0.06}{12}}\right)^{12*5}[/tex]
[tex]\displaystyle A=\$4,300\left(1.005}\right)^{60}[/tex]
Calculating:
A = $5,800
Viktor will have $5,800 in his account after 5 years
