# "y=a(1+r)^t I know this is a really basic question for this website, but I can't find it anywhere else. This is the question: ""If you deposit $3,750 in an account that pays 6% annual interest compounded monthly, what is the balance of the account after 11 years?"" The formula I'm using is y=a(1+r)t, with a being the initial amount, r being the rate in decimal form, and t is time relative to the rate, which makes y=3,750(1+.06)132 How do I solve for the ending amount (y)?" Staffangz 2022-09-14 Answered $y=a\left(1+r{\right)}^{t}$ I know this is a really basic question for this website, but I can't find it anywhere else. This is the question: "If you deposit$3,750 in an account that pays 6% annual interest compounded monthly, what is the balance of the account after 11 years?"
The formula I'm using is $y=a\left(1+r{\right)}^{t}$, with a being the initial amount, r being the rate in decimal form, and t is time relative to the rate, which makes $y=3,750\left(1+.06{\right)}^{132}$
How do I solve for the ending amount (y)?
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Jovany Newman
A better formula to use would be
$y=a{\left(1+\frac{r}{k}\right)}^{kt},$
where k is the number of times the interest is compounded per year. So, plugging in your information gives
$y=3750{\left(1+\frac{.06}{12}\right)}^{132}=\mathrm{}7243.55$