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If $75 is invested at an interest rate of 8% per year and is compounded monthly, how much will the investment be worth in 15 years?

1 Answer

Aug 16, 2016

$A_{n} = P \cdot {(1 + \frac{i}{12 \cdot 100})}^{n \cdot 12}$ $A_n=P*(1+i/(12*100))^(n*12)$
$A = $ 248.02$ $A=$248.02$

Explanation:

principal is compounded per month
$A_{n} = P \cdot {(1 + \frac{i}{12 \cdot 100})}^{n \cdot 12}$ $A_n =P*(1+i/(12*100))^(n*12)$

$A_{15} = 75 \cdot {(1 + \frac{8}{12 \cdot 100})}^{15 \cdot 12} = 248.02$ $A_15=75*(1+8/(12*100))^(15*12) =248.02$

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