Question

Use the appropriate compound interest formula to compute the balance in the account after the stated period of time$7,000 is invested for 16 years with an APR of 5% and monthly compounding.The balance in the account after 16 years is $Round to the nearest cent as needed.)

Answer 1

We will use the formula

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ where \\ P=money\text{ invested = \$7,000} \\ r=APR=5\%=(5)/(100)=0.05 \\ t=time\text{ in years = 16} \\ n=number\text{ of compoundings = monthly =12} \\ A=amount=balance\text{ in the account after t years } \end{gathered}`

Applying we have

Hence the answer is $15,552.92