Question

Suppose you want to have $ 749,791 for retirement in 13 years. Your account earns 9.5 % interest monthly. How much interest will you earn?

Answer 1

Compound interest formula

A = P (1 + r/n) ^ nt

Where:

A = future value

P = principal = 749,791

r = interest rate = 9.5% / 100 = 0.095 (decimal form)

n= number of compounding periods per year = 12

t = years = 13

Replacing:

A = 749,791 ( 1 + 0.095/12)^12*13

A= $2,565,558.848

Interest :

A - P = 2,565,558.848 - 749,791 =$ 1,815,767.848