The amount in account after 6 years is $ 3774.70904
Solution:
The formula for amount when interest is compounded is:
[tex]A = p(1+\frac{r}{n})^{nt}[/tex]
Where,
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per unit t
t = the time the money is invested or borrowed for
From given,
p = 3500
t = 6 years
[tex]r = 1.26 \% = \frac{1.26}{100} = 0.0126[/tex]
n = 12 ( since compounded monthly )
Substituting the values we get,
[tex]A = 3500(1+\frac{0.0126}{12})^{12 \times 6}\\\\A = 3500(1+0.00105)^{72}\\\\A = 3500 \times 1.00105^{72}\\\\A = 3500 \times 1.078488\\\\A = 3774.70904[/tex]
Thus the amount in account after 6 years is $ 3774.70904
