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John deposits $25 at the end of each month in a savings account with 6.4% annual interest compounded monthly. What is his account balance at the end of 15 years? *

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Answer:

$ 65.13

Explanation:

John deposits $25 at the end of each month in a savings account with 6.4% annual interest compounded monthly. What is his account balance at the end of 15 years? *

The formula for compound interest =

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

Where

P = Initial amount deposited = $25

r = Interest rate = 6.4% = 0.064

n = number of times interest is compound = monthly = 12 times

t = time in years = 15 years

A = $25 × (1 + 0.064/12)^12 × 15

A = $65.13

His account balance at the end of 15 years is $65.13

User Rob Lauer
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