Question

32. Michelle invested $10,000 in an account that earns 8.5% interest that is compounded monthly. Write an exponential model for the balance of the account, then determine the amount of money in the account in 15 years. Answer: Equation:​

Answer 1

$25,626.53

Explanation:

You are going to want to use the compound interest formula, which is shown below.

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 8.5% into a decimal:

8.5% -> -> 0.085

Now lets plug in the values into the equation

Lastly, subtract the total from the initial balance:

Michelle earned $25,626.53 in interest.