Question

$25,300 are deposited into an account with a 4.5% interest rate, compounded monthly.

find the accumulated amount after 25 years.

Hint: A= P(1+r/k)kt

Answer 1

`A=\$77765.69`

Explanation:

Let the principal/initial value be
`P=\$25300`, the number of times the interest is compounded per year be
`k=12`, and the annual interest rate be
`r=4.5\%=0.045` where we need to plug in
`t=25`:

`\displaystyle A=P\biggr(1+(r)/(k)\biggr)^(kt)\\\\A=\$25300\biggr(1+(0.045)/(12)\biggr)^(12(25))\\\\A\approx\$77765.69`