Question

If Bob and Judy combine their savings of ​$1 comma 8001,800 and ​$900900​, ​respectively, and deposit this amount into an account that pays 4 %4% annual​ interest, compounded​ monthly, what will the account balance be after 33 ​years?

Answer 1

future value of a single amount = A*(1+r)^n

here,

A =$1800 +900 =>$2700.

r = 4% per annum =>4/12=>0.333333%=>0.0033333

n=33 years * 12 months

=>396 months.

the account balance after 33 years

=>$2700 *(1.00333333)^396

=>$10,084.94.