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

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

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+(r)/(100))^t\\A=7000(1+(0.833)/(100))^(300)\\A = \$ 84,314`

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