Question

Steven has just deposited $ 10,000 in a bank account that has a 12%
monthly interest rate. What's in the account within 3
years

Answer #1

Using Future value of sum formula , we can calculate the the total amount in account within 3 years. | |||||||||

Future value of sum = P x (1+r)^n | |||||||||

Future value of sum = total balance in account in 3 years = ? | |||||||||

P = amount deposited = $10,000 | |||||||||

r = monthly interest rate = 12%/12 = 1% | |||||||||

n = number of months = 3 years x 12 = 36 | |||||||||

Future value of sum = 10000 x (1+0.01)^36 | |||||||||

Future value of sum = 10000 x 1.430769 | |||||||||

Future value of sum = 14307.69 | |||||||||

Account balance in 3 years = $14,307.69 |

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