Question

$1 050 at 6% for 25 years compounded annually

Answer 1

The formula for compound interest is
`A = P(1 + r/n)^((nt))`

In this formula:
A = the future value of the investment/loan, including interest
P = the initial deposit or loan amount
r = the annual interest rate as a decimal
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for


To solve, first substitute:
`A = 1050(1 + 0.06/1)^((1*25))`

Then simplify:
`image`



After 25 years the value of the investment/loan will be $ 4506.46.

Answer 2

18 900 6% on 25 years compounded annually