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Sara invests $30,000 in an account that pays 5.25% annual compound interest. She will not make any additional deposits or withdrawals. How much interest will she earn on her investment after 25 years? I NEED HELP PLZ

User Nischalinn
by
7.4k points

2 Answers

2 votes

Answer:

$77,813.68

Explanation:

User Hasseg
by
6.6k points
4 votes

Answer:


I=\$77,813.68

Explanation:

we know that

The compound interest formula is equal to


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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have


t=25\ years\\ P=\$30,000\\ r=5.25\%=5.25/100=0.0525\\n=1

substitute in the formula above


A=30,000(1+(0.0525)/(1))^(25*1)


A=30,000(1.0525)^(25)


A=\$107,813.68

Find out the total interest I


I=A-P

so


I=\$107,813.68-\$30,000=\$77,813.68

User Jli
by
7.4k points