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+(r)/(n))^(nt)`

Where,

`\begin{gathered} p=9000 \\ r=(5.5)/(100) \\ r=0.055 \\ n=12 \\ t=21 \end{gathered}`

`\begin{gathered} A(t)=P(1+(r)/(n))^(nt) \\ A(21)=9000(1+(0.055)/(12))^(12*21) \\ A(21)=9000(1.00458)^(12*21) \\ A(21)=9000(1.00458)^(252) \\ A(21)=9000*3.165658 \\ A(21)=28490.92 \end{gathered}`

so amount after 21 year is $28490.92