Question

Jamal deposits $1000 into a savings account on his 18th birthday. If the 2% interest is compounded yearly, how much will he have in the account on his 65th birthday?

Write your answer as a decimal rounded to the hundredths place. Do not include the dollar sign as part of your answer.

Answer 1

13.52

Explanation:

Khan Academe

Answer 2

The number of years (n) that the deposit stayed in his balance is given by: 65 - 18 = 47 years.

The future value (FV) of a deposit (P), deposited at an interest rate of r% compounded yearly for n years is given by


`FV=P(1+r)^n`

Given that Jamal deposits P = $1000 into a savings account on for n = 47years at 2% interest compounded yearly, the amount in his bank account at the end of the period is given by


`FV=1000(1+0.02)^(47) \\ \\ =1000(1.02)^(47)=1000(2.53634) \\ \\ =\$2,536.34`