Question

. If $200 is invested at the end of each month into an account that has an APR of 3.4% compounded monthly, what will the balance be after 15 years?

Answer 1

$332.82

Explanation:

We will use the compound interest formula provided to solve this:

`A=P(1+(r)/(n) )^(nt)`

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, we change 3.4% into a decimal:

3.4% ->
`(3.4)/(100)` -> 0.034

Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:

`A=200(1+(0.034)/(12))^(12(15))`

`A=332.82`

Your balance after 15 years will be $332.82