SOLUTION: If I put $250 in an account that earns 7.5%, how much will there be in the account at the end of 15 years? Could you help me with this problem please?

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Question 710722: If I put $250 in an account that earns 7.5%, how much will there be in the account at the end of 15 years?
Could you help me with this problem please?
Found 2 solutions by tutor_paul, stanbon:
Answer by tutor_paul(519) About Me  (Show Source):
You can put this solution on YOUR website!
You need to know the equation for future value of money for this problem. Once you know it, this problem is a piece of cake:
FV+=+PV%2A%281%2Br%29%5En
Where:
FV = Future Value
PV = Present Value
r = Annual Interest Rate
n = number of periods.
You have all this information, so just plug it in. (Note 7.5%=0.075)
FV=250%2A%281%2B.075%29%5E15
FV=250%2A%281.075%29%5E15
FV=250%2A2.96
highlight%28FV=739.72%29
Wow, $250 grew to almost $740! That's the "miracle" of compound interest. So start saving now!
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Good Luck,
tutor_paul@yahoo.com

Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
If I put $250 in an account that earns 7.5%, how much will there be in the account at the end of 15 years?
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Note: When you post investment problems you should indicate
if the investment is made at simple interest or at compound interest rules.
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Using Simple interest forms:
A(t) = P(1 + rt)
A(15) = 250(1+0.075*15) = $531.25
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Using interest forms with yearly compounding:
A(t) = P(1 + (r/n))^(nt)
A(15) = 250(1+(0.075/1))^15 = $739.72
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Cheers,
Stan H.
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