Answer:
$128.34
Step-by-step explanation:
We will use the compound interest formula to solve this problem:
[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]
P = initial balance
r = interest rate (decimal)
n = number of times compounded annually
t = time
First, lets change 5% into its decimal form:
5% -> [tex]\frac{5}{100}[/tex] -> 0.05
Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:
[tex]A=100(1+\frac{0.05}{12})^{12(5)}[/tex]
[tex]A=128.34[/tex]
The amount of the investment after 5 years would be $128.34
