Question

A retirement account is opened with an initial deposit of $8,500 and earns 8.12% interest compounded monthly. What will the account be worth in 20 years?

Answer 1

8,500 x .0812 = 690.2

690.2 x 12 = 8282.4

8282.4 x 20 = 165, 648

165,648 + 8,500 = 174,148

Answer 2

Amount receive after 20 year = $42,922.2746

Step-by-step explanation:

Given:

Principal(P) = $8,500

Interest compounded monthly(r) = 8.12% / 12 = 0.677% = 0.00677

Number of years(n) = 20 year = 20 × 12 = 240

Amount after 20 years = ?

Computation of Amount:

`Amount = P(1+r)^n\\\\Amount = 8,500(1+0.00677)^(240)\\\\Amount = 8,500(1.00677)^(240)\\\\Amount = 8,500* 5.04967937\\\\Amount = 42,922.2746`

Amount receive after 20 year = $42,922.2746