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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?

  • maths -

    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
    periods.

    Plug the above values into the given
    Eq.

    Answer: P = $27,137.65.

    b. I = P - Po

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