To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal form, so 6.5% becomes 0.065).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.

Given in the problem:
P = $25,000
r = 6.5% = 0.065
n = 4 (since interest is compounded quarterly)
t = 50 - 21 = 29 years (the time from your 21st birthday to your 50th birthday)

Substituting these values into the formula, we get:

A = $25,000 * (1 + 0.065/4)^(4*29)

Now, we just need to calculate the value of A.

Step 1: Calculate the value inside the bracket
1 + 0.065/4 = 1.01625

Step 2: Raise the result to the power of 4*29
(1.01625)^(4*29) = 3.207816942

Step 3: Multiply the result by the principal amount
$25,000 * 3.207816942 = $80,195.42

So, on your 50th birthday, your account balance will be approximately $80,195.42.

Question

To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal form, so 6.5% becomes 0.065).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.

Given in the problem:
P = $25,000
r = 6.5% = 0.065
n = 4 (since interest is compounded quarterly)
t = 50 - 21 = 29 years (the time from your 21st birthday to your 50th birthday)

Substituting these values into the formula, we get:

A = $25,000 * (1 + 0.065/4)^(4*29)

Now, we just need to calculate the value of A.

Step 1: Calculate the value inside the bracket
1 + 0.065/4 = 1.01625

Step 2: Raise the result to the power of 4*29
(1.01625)^(4*29) = 3.207816942

Step 3: Multiply the result by the principal amount
$25,000 * 3.207816942 = $80,195.42

So, on your 50th birthday, your account balance will be approximately $80,195.42.

Knowee AI · Accepted Answer

To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal form, so 6.5% becomes 0.065).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.

Given in the problem:
P = $25,000
r = 6.5% = 0.065
n = 4 (since interest is compounded quarterly)
t = 50 - 21 = 29 years (the time from your 21st birthday to your 50th birthday)

Substituting these values into the formula, we get:

A = $25,000 * (1 + 0.065/4)^(4*29)

Now, we just need to calculate the value of A.

Step 1: Calculate the value inside the bracket
1 + 0.065/4 = 1.01625

Step 2: Raise the result to the power of 4*29
(1.01625)^(4*29) = 3.207816942

Step 3: Multiply the result by the principal amount
$25,000 * 3.207816942 = $80,195.42

So, on your 50th birthday, your account balance will be approximately $80,195.42.

Today is your 21st birthday and your bank account balance is $25,000. Your account is earning 6.5% interest compounded quarterly. How much will be in the account on your 50th birthday?

Question

Solution

Similar Questions

Upgrade your grade with Knowee