Question

At the end of year 4, the account was valued at $2619.99. At the end of year 5, the account was valued at $2675.01. What was the value of the account at the end of year 30? Round your answer to the nearest whole number.

a) $2619
b) $2675
c) $3200
d) $4000

Answer 1

To find the value of the account at the end of year 30, calculate the growth rate from year 4 to year 5 and use that to project the value. The projected value at the end of year 30 is $4025, rounded to the nearest whole number.

Step-by-step explanation:

To find the value of the account at the end of year 30, we can calculate the growth rate from year 4 to year 5 and use that to project the value for year 30.

1. Calculate the growth rate: ($2675.01 - $2619.99) / $2619.99 = 2.12%
2. Use the growth rate to project the value for year 30: $2619.99 * (1 + 0.0212)^26 = $4025.07
3. Round the answer to the nearest whole number: $4025.07 rounded to the nearest whole number is $4025