Question

Amy has deposited $661 in a savings account that earns interest at a rate of 3.1% compounded monthly. What will the account balance be in 15 years?

Answer 1

First we need the formula to convert monthly interest to annual interest.
Annual interest = (1 + .031/12)^12
Annual interest = (1.0025833333)^12
Annual interest = 3.1444273306 %
Okay that's the first step.

Answer 2

use the annual compounding equation
\[FV = PV*(1+i)^{n}\]

Answer 3

FV=661(1+3.144)^15

Answer 4

Well seems Shorthell posted the next step.

Answer 5

so then it would be 661(4.144)^15

Answer 6

when you plug in 'i' remember that a percent is actually a decimal, so 3.1% is actually 0.031

Answer 7

NO - INTEREST RATE IS INCORRECTLY ENTERED

Answer 8

Ugh hit the caps key - sorry

Answer 9

661(1+0.031)^15

Answer 10

661(1.031)^15

Answer 11

661(1.58)

Answer 12

FV=661*(1+.03144)^15
That looks correct

Answer 13

@Shorthell you're doing it right

Answer 14

then 661(1.58)=1044.38

Answer 15

then add 661 to 1044.38

Answer 16

i must have done something wrong because its not one of my answers

Answer 17

I get 1,051.63
I think that decimal rounded to 1.58 makes the difference

Answer 18

oh, the 1044.38 is the "future value" that 661 grows into, so it's just 1044.38

Answer 19

i think wolf is right i did round though and got a complete different answer.

Answer 20

thanks Shorthell

Answer 21

no prob but the closest answer is yours but is off by a lil the answer is 1051.69

Answer 22

close enugh for me! ^_^ good job @Shorthell

Answer 23

Okay I recalculated.
I used the 3.144 interest but the actual interest is 3.1444273306
.03144 ^ 15 = 1.5909610408
.031444273306 ^ 15 = 1.5910599150921
see how "dramatically" that changes the total?

Answer 24

what would the final answer be?

Answer 25

The final answer is $1,051.69

Answer 26

I thought so haha

Answer 27

I'm glad you came back to check. Yes, I just had to know where that difference was.