Question

. If $200 is invested at the end of each month into an account that has an APR of 3.4% compounded monthly, what will the balance be after 15 years?

Answer 1

Answer:

$332.82

Step-by-step explanation:

We will use the compound interest formula provided to solve this:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, we change 3.4% into a decimal:

3.4% -> $\frac{3.4}{100}$ -> 0.034

Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:

$A=200(1+\frac{0.034}{12})^{12(15)}$

$A=332.82$

Your balance after 15 years will be $332.82