Question

At the time of her​ grandson's birth, a grandmother deposits $ 7000 in an account that pays 10% compounded monthly. What will be the value of the account at the​ child's twenty-first​ birthday, assuming that no other deposits or withdrawals are made during this​ period? The value of the account will be ____

Answer 1

Answer:

the value his child get after 25 years will be $84,314

Step-by-step explanation:

grandmother deposit =  $ 7000

compounded interest monthly =  10%

for monthly compounded = 10/12 = 0.833%

time = 25 years = 25 × 12 = 300 months

compound interest =

$A= P(1+\dfrac{r}{100})^t\\A=7000(1+\dfrac{0.833}{100})^{300}\\A = \ 84,314$

hence the value his child get after 25 years will be $84,314