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Question

# Use the appropriate compound interest formula to compute the balance in account after the stated period of time. $\ 15,000$ is invested for $15$ years with an APR of $4.2 \%$ and monthly compounding.

Solution

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The goal is to calculate the balance in an account for $15$ years that has $\15000$ invested at an annual percentage rate of $4.2\%$ and monthly compounding.

To calculate the balance, apply the Compound Interest Formula for interest paid once a year:

$A=P\times \left(1+\dfrac{APR}{n}\right)^{nY}$

where

$A$ is the accumulated balance after $Y$ years. $P$ is the starting principal $APR$ is the annual percentage rate (as a decimal) $n$ is the number of compounding periods per year $Y$ is the number of years

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