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Neville put his graduation money in an account at Gringotts that earns 5.5%. He left his money there for 30 years. How much is his account worth if he invested $5,000?​

User Rahul Modi
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Final answer:

Neville's $5,000 investment will grow in 30 years at a 5.5% interest rate using the compound interest formula A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.

Step-by-step explanation:

The subject of this question is Mathematics, specifically focusing on the topic of compound interest. To calculate how much Neville's $5,000 investment will grow to in 30 years at a 5.5% annual interest rate, we will use the formula for compound interest:

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

Where:

  • A is the amount of money accumulated after n years, including interest.
  • P is the principal amount (the initial amount of money).
  • r is the annual interest rate (decimal).
  • n is the number of times that interest is compounded per year.
  • t is the time the money is invested for, in years.

Since the question does not specify how often the interest is compounded, we'll assume it is compounded annually (n = 1).

Therefore, A = $5,000(1 + 0.055/1)^(1*30) = $5,000(1 + 0.055)^30

Now, we calculate:

A = $5,000 * (1.055)^30

To find the value of A, simply calculate the above expression, which will give you the total value of the account after 30 years.

User BigAppleBump
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