Question

You invested $20,000 four years ago into an account paying 4.3% compounded monthly. If you invest another $15,000 into the same account today, what will be the value of your account five years from today and how much interest will the account earn?

Answer 1

To calculate the value of the account after five years, use the formula for compound interest. The interest earned can be calculated by subtracting the initial investment from the final value of the account after five years.

Step-by-step explanation:

To calculate the value of your account five years from today, we can use the formula for compound interest: A = P(1 + r/n)^(nt). Where A is the final amount, P is the initial principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. Plugging in the given values, we get:

A = (20000)(1 + 0.043/12)^(12*4) + (15000)(1 + 0.043/12)^(12*5)

Solving this equation will give us the value of your account after five years.

To calculate the interest earned, subtract the initial investment from the value of the account after five years.