Posted by mary on .
You deposit $10,000 in an account earning 4% interest compounded monthly.
a. How much will you have in the account in 25 years?
b. How much interest will you earn?
a. P = Po(1+r)^n.
Po = $10,000.
r = (4%/12) / 100% = 0.0033333 = Monthly
% rate expressed as a decimal.
n = 12Comp./yr * 25yrs = 300 Compounding
Plug the above values into the given
Answer: P = $27,137.65.
b. I = P - Po