Question

Lisa invests $2,799 in a retirement account with a fixed annual interest rate of 9% compounded 6 times per year. What will the account balance be after 13 years?

a) $4,777.44
b) $5,832.17
c) $5,246.31
d) $6,114.29

Answer 1

The account balance after 13 years will be approximately $5,246.31.

Step-by-step explanation:

To calculate the account balance after 13 years, we can use the formula for compound interest:

A = P(1+r/n)^nt

• A = the final account balance
• P = the initial investment
• r = the interest rate (expressed as a decimal)
• n = the number of times the interest is compounded per year
• t = the number of years

Plugging in the given values, we have:

A = 2799(1+0.09/6)^(6*13)

A = 2799(1+0.015)^(78)

A ≈ $5,246.31

Therefore, the account balance will be approximately $5,246.31 after 13 years.