You deposit 3000 in an account earning 2 interest compounded

You deposit $3000 in an account earning 2% interest compounded monthly. How much will you have in the account in 15 years??

Solution

Future value = present value (1+interest rate)^number of times

Present value = $3000

Interest rate = 0.02 annually = 0.02/12 = 0.00167 monthly

Period = 15 years = 15*12 = 180 months

Future value = 3000(1+0.00167)^180 = $4050.99

Future value =$4050.99