Asked by mary
You deposit $10,000 in an account earning 4% interest compounded monthly.
a. How much will you have in the account in 25 years?
b. How much interest will you earn?
a. How much will you have in the account in 25 years?
b. How much interest will you earn?
Answers
Answered by
Henry
a. P = Po(1+r)^n.
Po = $10,000.
r = (4%/12) / 100% = 0.0033333 = Monthly
% rate expressed as a decimal.
n = 12Comp./yr * 25yrs = 300 Compounding
periods.
Plug the above values into the given
Eq.
Answer: P = $27,137.65.
b. I = P - Po
Po = $10,000.
r = (4%/12) / 100% = 0.0033333 = Monthly
% rate expressed as a decimal.
n = 12Comp./yr * 25yrs = 300 Compounding
periods.
Plug the above values into the given
Eq.
Answer: P = $27,137.65.
b. I = P - Po