posted by Pat .
$1000 in a savings bond on the day you were born. The bond pays 6% interest compounded annually. How much is it worth in 18 yrs?
I know it earns $60 a yr. but I am lost after that.
P = Po(1+r)^n.
r = 6% / 100% = 0.06 = Annual % rate expressed as a decimal.
n = 1comp./yr * 18yrs = 18 compounding
P = 1000(1.06)^18 = $2854.34