Question

At the time of her​ grandson's birth, a grandmother deposits $3000 in an account that pays 5% compounded monthly. What will be the value of the account at the​ child's twenty-first​ birthday, assuming that no other deposits or withdrawals are made during this​ period? The value of the a

Answer 1

By the time her grandson turns 21, the account will be worth $ 8,554.27.

Explanation:

Given that at the time of her grandson's birth, a grandmother deposits $ 3000 in an account that pays 5% compounded monthly, to determine what will be the value of the account at the child's twenty-first birthday, assuming that no other deposits or withdrawals are made during this period, the following calculation must be performed:

X = 3,000 (1 + 0.05 / 12) ^ 21x12

X = 8,554.27

Thus, by the time her grandson turns 21, the account will be worth $ 8,554.27.