Susan decides to deposit $50,000 into a bank that offers 4.75% interest compounded monthly. After six...

Question

Question

Susan decides to deposit $50,000 into a bank that offers 4.75% interest compounded monthly. After six years, what will Susan's account total?

business finance

Answer 1

Answer #1

Annual Interest = 4..75%
Monthly interest = 4.75/12 = 0.3958%
Effective rate = (1.003958)^12 - 1 =4.85%

Amount deposited			50000
Multiply: FVF at 4.85% for 6th yr			1.32865
Amount in the account after 6yrs			66432.5

Answer s 66432.50

Answer 2

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