Gannon has deposited $742 in a savings account that earns interest at a rate of 3.4% compounded monthly. What will the account balance be in 15 years?

Question

anonymous · Answer

A = P(1 + i/m)^(ym)

where:

A is the account balance
P is the deposit
y is the # of years
m is the compounding period.

Just substitute and simplify now.

anonymous · Answer

okay so p= 742 y=15 m= 12 ?
I'm confused

anonymous · Answer

Where's the confusion?  You're doing fine so far.

anonymous · Answer

where does the percentage fit in?

anonymous · Answer

Example:

    Just using 5% as an example

    5% = 0.05

So, take the number for the "percent" and divide by 100 to use it in an equation.

anonymous · Answer

So, what does 3.4% equal without the % sign?

anonymous · Answer

.034

anonymous · Answer

Good.  you have all pieces now for your substitution.

anonymous · Answer

The   "i/m"    is    0.034/12

anonymous · Answer

YAY! okay i got it! you're amazing thank you so much

anonymous · Answer

uw!

anonymous · Answer

thx for the recognition! @alexislamp