# How much would Babette have accumulated after 15 years?

##
Babette spends $225 a year on lottery tickets. After 15 years, her total winnings are $1200. Suppose Babette had invested the money she spends on lottery tickets in an account that earns 6% per year compounded annually.

#A={R[(1+i)^n-1]}/i#

Babette spends $225 a year on lottery tickets. After 15 years, her total winnings are $1200. Suppose Babette had invested the money she spends on lottery tickets in an account that earns 6% per year compounded annually.

##### 2 Answers

I would use the compound interest formula to find the amount of money she earns after 15 years of investing an original amount of $225.

#### Explanation:

I'm not sure what the variables are for the formula you provided are, so I will go ahead and use a different compound interest formula.

A is the amount earned after investing

P is the principal amount invested

R is the rate of interest

N is the number of times a year the principal is compounded

T is the time in years

Since the original amount (before any interest) is $225, the P would be 225. The rate of interest is 6%, or 0.06. The number of times a year the principal is compounded is 1 because the problem says compounded annually/yearly. The time in years is 15.

Solve by PEMDAS:

The final answer should be around $539.33

After 15 years Babette would have accumulated

#### Explanation:

To solve this problem we use the formula which you have given. The purpose of the formula is to find the future value of an annuity (which is a regular payment into an account with compounding interest)

Given your formula;

Inputing all of this information into the formula yields;

I hope this helps :)

Additionally, I have a whole bunch of videos on these exact type of questions on my youtube channel;

https://www.youtube.com/playlist?list=PLSCq2jFAFL0DlI7niQ3cG5CudfeVROhbd

Check it out :)