Question

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

Answer 1

$77,813.68

Explanation:

Answer 2

`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`