A bank account was opened with $1000 when you were born, and has accrued a constant...

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A bank account was opened with $1000 when you were born, and has accrued a constant...

A bank account was opened with $1000 when you were born, and has accrued a constant 3% interest rate, compounded each month. On your 20th birthday, what will be the account balance?

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Answer 1

Answer #1

We use the formula:
A=P(1+r/1200)^12n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

A=$1000(1+0.03/12)^(12*20)

=$1000*1.820754995

=$1820.75(Approx).

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Answer 2

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