Dominic invested 19,000 in an account paying an interest rate of 6.1% compounded monthly. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 16 years?

Solution

Do mini c in v es t e d 19, 000 in an a cco u n t p a y in g an in t eres t r a t e o f 6.1% co m p o u n d e d m o n t h l y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w m u c h m o n ey, t o t h e n e a res t d o ll a r, w o u l d b e in t h e a cco u n t a f t er 16 ye a rs ?

Amount : 50298.07

Solution steps

Translate the problem into an equation:

A = 19000 (1 + \frac{0.061}{12})^{12 \cdot 16}

19000 (1 + \frac{0.061}{12})^{12 \cdot 16} = 50298.06902 \dots

Round to the nearest hundredth:

50298.07

Amount : 50298.07