Your grandparents started a savings account with $10,000 the day you were born. It earns 5% annually compounded monthly. How much will you have when you turn 18?

Question

asked Sep 20, 2022 187k views

1 Answer

Kiem Nguyen · Answer 1 · 2022-09-25T04:17:44+0000

Answer: You will have $24,551.84 when you turn 18.

Explanation:

Formula for accumulated amount earned in t years:

A=P(1+(r)/(12))^(12t) , where P = principal value, r = rate of interest

Given: P= $10000, r = 5% t = 18 years.

Substitute all values in formula, we get

$A=10000(1+(0.05)/(12))^(12*18)\\\\=10000(1.004167)^(216)\\\\=10000(2.45518445623)\approx24551.84$

Hence, you will have $24,551.84 when you turn 18.