00:01
In this problem, you're working with compound interest, and you want to know how much is going to be in the account after 15 years.
00:17
If 5 ,000 is deposited, that's going to be the p.
00:29
Let me take that off there.
00:31
That's going to be the p in this formula, where p is the principal or the amount invested.
00:38
We're going to have a rate of 5%.
00:51
And that rate needs to be changed to a decimal.
00:54
So remember, that means move your decimal point two places to the left.
00:59
And that's going to give you 0 .05.
01:04
Compounded monthly.
01:06
All right, that's going to work with the n in the formula.
01:11
And monthly would be 12 times per year.
01:15
All right.
01:16
And i didn't list the t.
01:20
All right, so, and the time of the investment is 15 years.
01:25
All right, so we'll go ahead and substitute in the information and then use a calculator.
01:31
So the amount that we're going to end up with, a, is going to be the principal, which is the amount invested, 5 ,000 times the quantity of one plus the r, which is your rate as a decimal, over the number of times per year, n raised to the n times t, 12 times 15.
02:07
So the rest of this is calculator and using order of operations.
02:12
So we'll go ahead and simplify the part that's inside the parentheses first, because that's the first part of order of operations.
02:20
So that part would get simplified inside.
02:24
And actually the fraction would get simplified first...