Question

You deposit $500 each month into an account earning 6% interest compounded monthly.a) How much will you have in the account in 20 years? __________________b) How much total interest will you earn? ____________________

Answer 1

As given by the question

(a)

There are given that the initial payment is $500.

Now,

From the formula, the equation will be:

`A=500(1+(0.06)/(12))^(12*20)`

Then,

`\begin{gathered} A=500(1+(0.06)/(12))^(12*20) \\ A=500(1+(0.06)/(12))^(240) \\ A=500(3.310) \\ A=1655 \end{gathered}`

Hence, $1655 will you have in the account in 20 years.