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