how to calculate present value and compound interest

Question

$150,000 compound amount, 22 years term of investment, 15% nominal rate, interest compounded annually.

Answer 1

The formula for compound interest is  A = P(1+r/n)^nt  where  

 

P = Principal or initial amount

r = interest rate as a decimal

t = number of years

A = Accumulated or final amount

n = number of compounding per year 

 

Here P = 150000, r = 0.15, t = 22, n = 1

 

A = 150000(1+0.15)²²

   = 150000(1.15)²²

   = 150000(21.645)

   = 3246711.86  

 

So the final amount is $3,246,711.86