$4,200 principal earning 2%, compounded monthly, after 34 years

Question

Find the balance in the account after the given period.

Answer 1

Use the compounding formula:

A(t) = A₀·(1 + rate/n)^nt

where:

A(t) = the amount (balance) you have after t years

A₀ = the starting amount = $4200

rate = the interest rate expressed as a decimal = 0.02

n = the number of compoundings per year = monthly = 12

t = years = 34

Plug in the numbers and use your calculator to get the answer.