To find the balance we will use the . In this formula,
is the amount in the account after
is the principal amount invested,
is the annual interest rate, and
is the number of compounding periods each year.
In our case, we know that
Since there are
months in one year, the number of compounding periods is
Let's substitute these values into the compound interest formula and calculate the balance after
years in our deposit.
We found that, after
years, the balance will be around