Find the balance in the account.
$1,400 principal earning 7%, compounded monthly, after 22 years
a
$6,202.56
b
$395,472.00
c
$1,591.11
d
$6,501.27
To find the balance in the account after 22 years with a $1,400 principal earning 7% compounded monthly, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future balance
P = the principal amount (initial deposit) = $1,400
r = annual interest rate in decimal form = 7% = 0.07
n = number of times interest is compounded per year = 12 (monthly)
t = number of years = 22
Plugging the values into the formula:
A = $1,400(1 + 0.07/12)^(12*22)
A ≈ $6,202.56
Therefore, the balance in the account after 22 years would be approximately $6,202.56.
The correct answer is:
a
$6,202.56