Question

If $75 is invested at an interest rate of 8% per year and is compounded monthly, how much money is in the account in 15 years?

Answer 1

Answer:

$248.03

Step-by-step explanation:

The formula you use for this is as follows:

$A(t)=P(1+\frac{r}{n})^{nt}$

where A(t) is the amount after the compounding is done, P is the initial amount invested, r is the interest rate in decimal form, n is the number of times the compounding is done per year, and t is the time in years.  Using that information and filling in our equation gives us this:

$A(t)=75(1+\frac{.08}{12})^{(12)(15)}$

which simplifies down to

$A(t)=75(1+.0066667)^{180}$

which simplifies further to

$A(t)=75(3.307118585)$

which multiplies to $248.0338938.  Round to the nearest cent to get your answer.

Answer 2

Answer:

$248.03

Step-by-step explanation: