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3 votes
On the day their child was born, her parents deposited $25,000 in a savings account that earns 12% 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. $136,839.14 $153,259.84 $85,613.50 $448,000.00

2 Answers

3 votes

Value #0 = 25,000 (1 + .12)⁰ = $25,000
Value #1 = 25,000 (1 + .12)¹
Value #2 = 25,000 (1 + .12)²
Value #3 = 25,000 (1 + .12)³
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Value #16 = 25,000 (1 + .12)¹⁶ = 25,000 (6.1304) = $153,259.84


I think it was Albert Einstein who was purported to have said that
"Mankind's greatest invention of all time has been compound interest.".
User Pepys
by
7.7k points
6 votes

Answer:

$153,259.84

Explanation:

An=25,000(1+.12)^16

=$153,259.84

User TJaniF
by
8.6k points