You deposit $1,000 in a savings account that earns 0.5% each month. Assuming you do not deposit or withdraw any money from the account, how much money will you have in the account after 3 years?
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1) Don't post with no work shown.
2) Insufficient information. We must know the type of the interest crediting.
Alright, my apologies. This problem is solved through geometric sums. So far I have that s3= 1000(1-0.005^3)/(1-.005) and that should come to s3=1000(1)/(.995)
What I got in the end was that I would have $1005.03
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I'm not sure if I did the simple operations properly. Could someone help me double check the work?
It is definitely not going to be $1005.03
They are not withdrawing or depositing money for 3 years, and it gains 0.5% each month.
So, $1,000 x 0.005=5
1,000+5=1,005 For the first month
Do you see why 1,005.03 won't be the answer?
It is not solved through sums. There is only one deposit.
Month 1: $1,000.00 * 1.005
Month 2: $1,000.00 * 1.005 * 1.005
I also that the amount was too small. I followed the formula sn=a1(1-rn)/(1-r), but it wasn't realistic in the end.
So I add for each amount each month?
for a total of 3 years
Nor is it correct. That assumes multiple deposits. You've only one.
Month 2: $1,000.00 * 1.005 * 1.005 = $1.000.00 * 1.005^2
Month 3: $1,000.00 * 1.005^3
Month 4: $1,000.00 * 1.005^4
These are not separate amounts. This is a single, accumulating deposit. They represent the value at any moment in time. They are NOT to be added up.
Then $1,000(1.005^3) would be the correct amount after accumulating for 3 years left alone
No, that's the MONTHLY rate. You need 36 months.
God forgive my teacher who didn't provide this information. But $1,000(0.005^36)=1.455192E-83? The amount is shrinking
Not 0.005, that is just the monthly interest rate. The monthly accumulation rate is 1 + 0.005 = 1.005. Try again.