Question

At the time of her grandsons birthday grandmother deposits $9000 in an account that pays 5.5% compounded monthly what will be the value of the account at the Charles 21st birthday assuming that no other deposits or withdrawals are made during this period

Answer 1

Given:

Amount = $9000

Rate=5.5%

time =21

Formula:

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

Where,

$\begin{gathered} p=9000 \\ r=\frac{5.5}{100} \\ r=0.055 \\ n=12 \\ t=21 \end{gathered}$

$\begin{gathered} A(t)=P(1+\frac{r}{n})^{nt} \\ A(21)=9000(1+\frac{0.055}{12})^{12\times21} \\ A(21)=9000(1.00458)^{12\times21} \\ A(21)=9000(1.00458)^{252} \\ A(21)=9000\times3.165658 \\ A(21)=28490.92 \end{gathered}$

so amount after 21 year is $28490.92