Answer:
Account balance after 15 years is $ 1,222,370.81
Step-by-step explanation:
Given data:
Principal amount, P = $ 2500
rate of interest, r = 42% = 42/100 = 0.42
Here interest is compounded monthly, hence
no. of times interest is compounded per year, n = 12
time in years, t = 15 years
We know that the formula to calculate the final amount, A when the interest is compounded is:
A = P [tex](1 + \frac{r}{n} )^{nt}[/tex]
Substituting the known values in the above formula, we get
A = 2500 * [tex](1 + \frac{0.42}{12} )^{12*15}[/tex]
= 2500 * [tex]1.035^{180}[/tex]
= 2500 * 488.95
= $ 1,222,370.81
