Victor put $5,000 into a bank account 7 years ago. How much should have in the...

Victor put $5,000 into a bank account 7 years ago.

How much should have in the account today if the account advertises a 5% APR compounded monthly?

(Round to the nearest cent and do not enter the dollar sign)

Expert Solution

Monthly rate = 5% / 12 = 0.416667%

Number of periods = 7 * 12 = 84

Future value = Present value (1 + r)^n

Future value = 5000 (1 + 0.00416667)^84

Future value = 5000 * 1.418036

Future value = 7,090.18

Victor should have 7,090.18

jeff jeffy answered 2 years ago

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