Question

Kendall puts 1,000.00 into an account to use for school expenses the account earns 9% interest compounded monthly how much will be in the account after 9 years

Answer 1

To calculate the total amount accrued when you deposit the money in an account that earns compound interest you have to use the following formula

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

A: amount accrued

P: principal amount

t: time, years

r: interest rate, expresed as a decimal value

n: number of coumpound periods

For this exericse

The principal amount is P=$1000

The time is t= 9 years

The interest rate is 9%/100=0.09

The compounding periods are 12/year (the interest is compounded monthly) so for the 9 year time period is 9*12=108

`\begin{gathered} A=1000(1+(0.09)/(108))^(9\cdot108) \\ A=2247.15 \end{gathered}`