Problema Solution
An initial deposit of $6,000 earns 6% interest, compounded monthly. How much will be in the account after 15 years? (Give your answer correct to the nearest cent.)
Answer provided by our tutors
P = $6,000 the principal (the money deposited)
r = 0.06 or 6% annual interest rate
t = 15 years
m = 12 compounding period per year
i = r/m = 0.06/12 = 0.005 interest rate per period
n = t*m = 15*12 = 180 total number of compounding periods
A = future value
A = P(1 + i)^n
A = 6000(1 + 0.005)^180
A = $14,724.56
click here to see the calculation
after 15 years there will be $14,724.56 in the account.