Question

Brooklyn invested dollar sign, 820$820 in an account paying an interest rate of 6, point, 5, percent6.5% compounded monthly. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 55 years?

Answer 1

Use the compound interest formula A = P(1 + r/m)^{mt}.

P = $820, r = 0.065, m = 12, t = 55, so
A = 820(1 + 0.065/12)^{12·55} = 820(1.0054166667)^{660} ≈ $28,988.53.

So about $28,988.53 after 55 years.