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#
An investor places $5,000 in an account. The stated annual interest rate is 6% compounded monthly. The value of the account at the end of three years is closest to:

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Question:

A
$5,983.

explanation

1212With more than one compounding period per year,

PV = 5,000; r = 6%; m = 12; ;n = 3;mx n=12 x3 = 36.

To compute FV3, enter PV = -5,000; I = 0.5; PMT = 0; and N = 36 to get 5,983.40.

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