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?

Answers

Answer 1

Answer:

$248.03

Step-by-step explanation:

The formula you use for this is as follows:

[tex]A(t)=P(1+\frac{r}{n})^{nt}[/tex]

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:

[tex]A(t)=75(1+\frac{.08}{12})^{(12)(15)}[/tex]

which simplifies down to

[tex]A(t)=75(1+.0066667)^{180}[/tex]

which simplifies further to

[tex]A(t)=75(3.307118585)[/tex]

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

Answer 2

The amount of money is $248.02.

Principal amount = P=75

Interest rate = r = 8% = 0.08

Number of years = t = 15

Number of times compounded in a year = n = 12

A = Amount after t years.

After 15 years there will be:

[tex]A=P\left(1+\frac{r}{n}\right)^{nt}\\ A=75\left(1+\frac{0.08}{12}\right)^{\left(12\cdot15\right)}\\ A=248.019110806\\ A \approx 248.02[/tex]

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Answers

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Step-by-step explanation:

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