A couple deposits 25,000 into an account earning 4% annual interest for 15 years. Calculate the future value of the investment if the interest is compounded monthly. Round your answer to the nearest cent.

Solution

A couple deposits 25, 000 into an account earning 4% annual interest for 15 years. Calculate the future value of the investment if the interest is compounded monthly. Round your answer to the nearest cent.

Solution

Amount : 45507.54

Solution steps

Translate the problem into an equation:

A = 25000 (1 + \frac{0.04}{12})^{12 \cdot 15}

25000 (1 + \frac{0.04}{12})^{12 \cdot 15} = 45507.54068 \dots

Round to the nearest hundredth:

45507.54

Amount : 45507.54

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