Answer:: $ 5,588.59
Working notes for the above answer is as under
Base amount = $2,944.00
Interest Rate= 6%
Effective Annual Rate= 6%
Calculation period= 11 years
Now we will put all this figure in to the formula as follow
A = P(1 + r/n)nt
Where:
A = Accrued Amount (principal + interest)
P = Principal Amount
I = Interest Amount
R = Annual Nominal Interest Rate in percent
r = Annual Nominal Interest Rate as a decimal
r = R/100
t = Time Involved in years, 0.5 years is calculated as 6 months, etc.
A = 2944 (1+0.06)11
=$ 5,588.59
Alternatively we can make the table as follow
| Year | Year Interest |
Total Deposits |
Total Interest |
Balance |
| 1 | 177 | 2,944 | 177 | 3,120.64 |
| 2 | 187 | 2,944 | 364 | 3,307.88 |
| 3 | 198 | 2,944 | 562 | 3,506.35 |
| 4 | 210 | 2,944 | 773 | 3,716.73 |
| 5 | 223 | 2,944 | 996 | 3,939.74 |
| 6 | 236 | 2,944 | 1,232 | 4,176.12 |
| 7 | 251 | 2,944 | 1,483 | 4,426.69 |
| 8 | 266 | 2,944 | 1,748 | 4,692.29 |
| 9 | 282 | 2,944 | 2,030 | 4,973.83 |
| 10 | 298 | 2,944 | 2,328 | 5,272.26 |
| 11 | 316 | 2,944 | 2,645 | 5,588.59 |
Answer : $ 5,588.59
