Suppose that 19years ago, a benefactor set up an account for your education. This benefactor made a single deposit of $20,000 that has been earning 6% interest compounded monthly. Since the deposit 19 years ago, no money has been added to or taken from the account. Using a exponential function, what is the amount in the account?

To find the amount in the account you need to find the monthly interest and times it by the number of months since the benefactor opened the account.

Monthly interest:

to find 6% you must use the proportions:

$20,000/100% = X/6%

then cross multiply,

X = (20,000 x 6) / 100 = 1200

this number is your monthly interest.

Months

Now we have to find the months in 19 years:

12 x 19 = 228

times 12 because we know that a year has 12 months and we have 19 years so we must multiply those two.

Total amount:

$1200 (monthly interest rate) x 228 (months) = $273, 600