Answer:
$106,612.
Explanation:
To calculate the amount, A(t) for a principal, Ao compounded k times in a year for t years at r% interest rate, we use the formula:
[tex]A(t)=A_o(1+\frac{r}{k})^{kt}[/tex]
From the problem, the following information are given:
• The amount deposited, Ao = $60,000
,
• Annual Interest Rate, r = 4.8% =0.048
,
• Time, t = 18-6 = 12 years
,
• Compounding Period, k=12 (Monthly)
Substitute the values into the formula:
[tex]\begin{gathered} A(12)=60,000(1+\frac{0.048}{12})^{12\times12} \\ =60,000(1+0.004)^{144} \\ =60,000(1.004)^{144} \\ =106,611.95 \\ \approx\$106,612\text{ (to the nearest dollar)} \end{gathered}[/tex]
The balance in the account on Lily's 18th birthday is $106,612.
