Question

You deposit $5000 in an account earning 6% interest compounded monthly. How much will you have in the

account in 15 years?

Answer 1

• $12270.46

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Use the compound interest formula:

• 
  `A = P(1 + r/n)^(nt)`

Where:

• A = final amount;
• P = initial deposit = $5000;
• r = annual interest rate = 6%;
• n = number of times the interest is compounded per year = 12;
• t = time period in years = 15.

Plugging in the values, we get:

• A = 5000(1 + 0.06/12)¹²*¹⁵
• A = 12270.46