Logan opened a savings account 21 years ago with a deposit of $3,471.52. The account has an interest rate of 3.1% compounded monthly. How much interest has Logan earned?

Question

Mathematics

Judith Malone

14 March, 17:15

Logan opened a savings account 21 years ago with a deposit of $3,471.52. The account has an interest rate of 3.1% compounded monthly. How much interest has Logan earned?

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Answers (1)

Know the Answer?

Reed Bailey · Answer 1

P = $3,471.52, the principal

r = 3.1% = 0.031, annual ratr

n = 12, monthly compounding

t = 21 years

Note that n*t = 252.

The value after 21 years is

A = 3471.52 * (1 + 0.031/12) ²⁵²

= $6,650.91

The interest earned is

6650.91 - 3471.52 = 3179.39

Answer: $3,179.39