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Question:
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:
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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