Problema Solution
Jan Cain deposited $19,500 in the bank on January 1, 1995, at an interest rate of 12% com-
pounded annually. How much has accumulated in the account by January1, 2012?
Answer provided by our tutors
A = the future value after 17 year
P = $19,500 is the principal
r = 0.12 or 12% the annual rate
t = 17 year the number of years
m = 1 the number of compounding periods per year
n = m*t = 17 the number of compounding periods
i = r/m = 0.12 interest rate per period
A = P(1 + i)^n
A = 19500(1 + 0.12)^17
A = $133,887.797
after 17 years the account will have $133,887.797.