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Lynne invested \(500 into an account with a 6.5% interest rate compounded monthly. How much will Lynne’s investment be worth in 10 years?

F \)600.00

G \(938.57

H \)956.09

J $957.02

Short Answer

Expert verified

Lynne will get $956.09 after 10 years. Option H is correct choice.

Step by step solution

01

Step 1. Write the compound interest equation.

The compound interest equation is given by:

A=P1+rnnt, where A is the amount, P is the principal amount, r is the rate of interest, t is the time.

02

Step 2. Substitute the values. 

Lynne invested $500 for 10 years into an account with a 6.5 % interest rate compounded monthly.

Substitute 500 for P, 6.5 for r, 12 for n and 10 for t into the formulaA=P1+rnnt.

A=P1+rnn·t=500×1+0.0651212×10

03

Step 3. Simplify for A.

Simplify the equation for A.

A=P1+rnn·t=500×1+0.0651212×10=500×12.06512120=$956.09

Thus, Lynne will get $956.09 after 10 years. Option H is correct choice.

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