To solve this problem, we can use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (in decimal)
n = number of times that interest is compounded per year
t = the time the money is invested for in years

Given in the problem:
P = $500
r = 6% or 0.06 (in decimal)
n = 12 (since the interest is compounded monthly)
t = 5 years

Substituting these values into the formula:

A = 500 (1 + 0.06/12)^(12*5)

Calculating the values inside the parenthesis first:

= 500 (1 + 0.005)^(60)

= 500 (1.005)^60

Now, calculate the exponent:

= 500 * 1.34856

Finally, multiply the principal amount by the calculated value:

A = $674.28

So, the closest answer is B. $674.43.

Question

To solve this problem, we can use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (in decimal)
n = number of times that interest is compounded per year
t = the time the money is invested for in years

Given in the problem:
P = $500
r = 6% or 0.06 (in decimal)
n = 12 (since the interest is compounded monthly)
t = 5 years

Substituting these values into the formula:

A = 500 (1 + 0.06/12)^(12*5)

Calculating the values inside the parenthesis first:

= 500 (1 + 0.005)^(60)

= 500 (1.005)^60

Now, calculate the exponent:

= 500 * 1.34856

Finally, multiply the principal amount by the calculated value:

A = $674.28

So, the closest answer is B. $674.43.

Knowee AI · Accepted Answer