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If you deposit $2,000 into an account that pays 2% annual interest compounded monthly, how much money will be in the account in 5 years?

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Answer:

  $2,210.16

Step-by-step explanation:

The applicable formula for the account balance is ...

  A = P(1 +r/n)^(nt)

where principal P is invested at annual rate r compounded n times per year for t years. Here, we have P=2000, r=0.02, n=12, t=5. The balance is ...

  A = $2000(1 +0.02/12)^(12·5) = $2210.16

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Numerous calculators, apps, web sites, and spreadsheets can figure this for you.

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