Final answer:
Janet's account balance and interest earned over 15 years with monthly deposits and annual compound interest can be calculated using compound interest formulas or financial calculators. The interest earned is the difference between the final balance and the total deposits made.
Step-by-step explanation:
To calculate Janet's savings over 15 years with contributions of $550 per month at a 5.25% annual interest rate compounded annually, we use the future value of an annuity formula. However, because the interest is compounded annually while deposits are made monthly, we need to adjust the formula or use a financial calculator or software designed for these calculations.
Future Value of an Annuity Formula: FV = Pmt × ((1 + r/n)^(nt) - 1) / (r/n)
Where:
- Pmt is the payment amount per period
- r is the annual interest rate (decimal)
- n is the number of times that interest is compounded per year
- t is the number of years the money is deposited
However, since this question requires specific financial calculations that take into account monthly deposits and annual compounding, we shall simplify using a financial calculator or a specialized software as the formula does not directly apply.
Once the future value is determined, to find the amount of interest earned we subtract the total amount of deposits from the future value of the annuity. The interest is the difference between what the end balance is and what was actually deposited.