Question

You deposit $3000 in an account earning 3% interest compounded monthly. How much will you have in the account in 15 years?

Answer 1

Use the compound interest formula to find the amount in the account after 15 years.

The amount A in an account that earns interest at a rate r (written as a decimal) after t years, with n compounding periods a year where an initial amount P was invested, is given by:

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

Replace P=3000, r=0.03, n=12 and t=15 to find the amount after 15 years:

`A=3000(1+(0.03)/(12))^(12*15)=4702.295174...\approx4702.30`

Therefore, you will have $4702.30.