Question

Your grandfather put some money into an account for you on the day you were born. You are now 18 years old and are allowed to withdraw the money. The account currently has $ 8 comma 491 in it and pays an interest rate of 9 %. a. How much money would be in the account if you left the money there until your 25th​ birthday? b. What if you left the money until your 65th​ birthday? c. How much money did your grandfather originally put into the​ account? a. How much money would be in the account if you left the money there until your 25th​ birthday? The amount that would be in the account if you left the money there until your 25th birthday would be ​$ nothing. ​ (Round to the nearest​ dollar.)

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

Your grandfather put some money into an account for you on the day you were born. You are now 18 years old and are allowed to withdraw the money. The account currently has $ 8,491 in it and pays an interest rate of 9 %.

A) We need to use the following formula:

FV= PV*(1+i)^n

FV= 8491*(1.09^7)= $15,521.88

B) 65th birthday

FV= 8491*(1.09^47)= $487,533.25

C) We need to use the following formula:

PV= FV/(1+i)^n

PV= 8491/(1.09^18)= $1800.04