Given:
Investment = $5300
annual interest rate = 2.5% compounded monthly
The amount A after time t can be computed using the formula:
[tex]\begin{gathered} A\text{ = P\lparen1 + }\frac{r}{n})^{nt}^ \\ \\ Where\text{ P is the principal} \\ r\text{ is the rate of interest} \\ n\text{ is the number of compounding periods } \\ and\text{ t is the time in years} \end{gathered}[/tex]
(a) The amount A after 1 year
Substituting the given values:
[tex]\begin{gathered} A\text{ = 5300\lparen1 + }\frac{0.025}{12})^{12\times1} \\ \text{= \$5434.0288} \end{gathered}[/tex]
Answer:
Amount = $5434.03
