Question

On the day their child was born, her parents deposited $25,000 in a savings account that earns 11% interest annually. How much is in the account the day the child turns 16 years old (rounded to the nearest cent)? Hint: an = a1(1 + r)n, r ≠ 1, where a1 is the initial amount deposited and r is the common ratio or interest rate.

Answer choices:
$119,614.74 $132,772.36 $128,612.52 $440,000.00

Answer 1

Total = Principal * (1 + rate)^years
Total = 25,000 * (1.11)^16
Total = 25,000 * 5.3108943321
Total = 132,772.36
(This is the second answer)