Question

A deposit of $1500 in an account pays 5 1/4% interest compounded annually. How much will be in the account after 15 years?

Answer 1

$3,231.63

Explanation:

By the formula of compound interest ,

Amount finally = P
`(1 + (r)/(n) )^(nt)`

Where P is the principal amount. Here , P = $1500

r = rate of interest = 5.25% = 0.0525

n = 1 (Since , Compounded annually)

t = time for which the amount is invested = 15 (years)

Thus, Putting values in the formula, we get

Amount finally = 1500
`(1 + 0.0525)^(15)` = $3,231.63.

Thus, after 15 years , 3,231.63 dollars will be there in the bank.