Posted by **MONICA** on Wednesday, November 23, 2011 at 12:13pm.

Find the ending balance in an account that opens with $3,180, earns 11.5% interest compounded monthly, and is held for 20 years. (Round your answer to the nearest cent.)

B=p(12+r)^n

B=3,180(12+0.95)^20

B=1,759.52

Is this correct if not, can someone help me with the steps.

- ALGEBRA -
**drwls**, Wednesday, November 23, 2011 at 12:35pm
It is not correct. Why would you end up with less money after 20 years of earning interest? True, our banks are ripping us off, but they aren't THAT bad.

Your starting equation is wrong. So are your later calculations. Where did the 0.95 come from?

With monthly compounding 240 times,

B = P*[1 + (r/12)]^240

= 3180*[1.009583333]^240

= $ 31,372.45

- ALGEBRA -
**MONICA**, Wednesday, November 23, 2011 at 1:44pm
Thanks,drwls I see where I made a mistake with the 0.95 but where did the 240 come from.

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