1500(1+0.031/12)12x30

Question

I am having trouble resolving this problem, I don't really know how to do it.

Answer 1

I believe that you are doing a compound interest problem with initial principal $1500, 3.1% interest rate compounded monthly, for 30 years.

 

Your expression 12•30 is an EXPONENT, 360.  Using a calculator such as TI-84, you must enter the EXACT EXPRESSION BELOW INTO YOUR CALCULATOR:

1500(1+0.031/12)^(12*30).

 

This will give you the $ amount in the account after 30 years.  NOTE THE NECESSITY OF GROUPING PARENTHESES AROUND THE EXPRESSION FOR EXPONENT.

Answer 2

Hi Daiana,

 

The key here is to remember P E M/D A/S

That stands for parentheses, exponents, multiplication/division addition/subtraction.

This is the order in which you combine terms.

If multiple operations exist in any of these categories, they are resolved left to right.

 

We have

 

1500(1+0.031/12)12x30

 

Notice we have a pair of parentheses, so let's focus on that first.

 

Inside the parentheses is

1+0.031/12

Division comes before addition so 0.031/12 = 0.00258333...

Add this to 1

1+0.00258333 = 1.00258333...

 

Insert this back in the expression

1500(1.00258333)12x30

 

From here, the remainder of the expression is multiplication.  We tackle this left to right.

 

1500(1.00258333)12x30

--------------------------

 

Let's do the underlined multiplication first

1500 (1.00258333) = 1503.875

 

Insert this back into the expression

(1503.875)12x30

------------------

 

And the newly underlined multiplication

(1503.875)12 = 18046.5

 

Insert this back into the expression

18046.5 x 30 = 541,395