If 8000 dollars is invested in a bank account at an interest rate of 10 per cent per year, find the amount in the bank after 15 years if interests is compounded monthly

Answer 1

To find the amount in the bank after 15 years with monthly compounding interest, we'll use the formula for compound interest:

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

Where:
A = the total amount including the principal
P = the principal amount (the initial investment)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years

In this case:
P = $8000
r = 10% = 0.10 (as a decimal)
n = 12 (since interest is compounded monthly)
t = 15 years

Now we can plug in these values into the formula:

A = 8000(1 + 0.10/12)^(12*15)

A = 8000(1 + 0.008333)^180

A = 8000(1.008333)^180

A ≈ 8000(2.769)

A ≈ $22,152

So, the amount in the bank after 15 years, with monthly compounded interest, would be approximately $22,152.