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Question 1164233: A sum of $25,000 is invested in a savings account which pays interest at a rate of 7 percent per year compounded annually. If the amount is kept on deposit for 15 years, what will be the compound amount equal? How much interest will be earned during the 15 years?
Found 2 solutions by ikleyn, greenestamps:
Answer by ikleyn(52775)   (Show Source):
You can put this solution on YOUR website! .
The formula for the Future Value for such account is
FV =  =  = 68975.79 dollars.
I rounded to the nearest greater cent; but the bank may round differently.
Solved.
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For all details and explanations, and to see many other similar solved problems look into these two lessons
- Compound interest percentage problems
- Problems on discretely compound accounts
in this site, and learn the entire subject from there.
After reading these lessons, you will tackle such problems on your own without asking for help from outside.
Also, you have this free of charge online textbook in ALGEBRA-I in this site
- ALGEBRA-I - YOUR ONLINE TEXTBOOK.
The referred lessons are the part of this online textbook under the topic "Logarithms".
Save the link to this online textbook together with its description
Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson
to your archive and use it when it is needed.
Happy learning (!)
Answer by greenestamps(13198)  (Show Source):
You can put this solution on YOUR website!
The amount grows at the rate of (100%+7%) = 107% = 1.07 each year.
The value of $25,000 at that rate for 15 years compounded annually, is then
Use a calculator....
The interest earned is that final amount, minus the original $25,000.
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