Question

Bob Terwilliger received ​$12,654 for his services as financial consultant to the​ mayor's office of his hometown of Springfield. Bob says that his consulting work was his civic duty and that he should not receive any compensation. ​ So, he has invested his paycheck into an account paying 4.75 percent annual interest and left the account in his will to the city of Springfield on the condition that the city could not collect any money from the account for 150 years. How much money will the city receive in 150 years from​ Bob's generosity?

The amount of money the city will receive in 150 years from​ Bob's generosity is ​$ . ​(Round to the nearest ​ cent.)

Answer 1

The city of Springfield will receive approximately $63,661.36 from Bob's generosity after 150 years.

Step-by-step explanation:

To calculate how much money the city of Springfield will receive in 150 years from Bob's generosity, we can use the formula for compound interest. Bob invested his paycheck of $12,654 into an account paying 4.75% annual interest. We can calculate the future value of the investment using the formula:

FV = PV × (1 + r)^n

where FV is the future value, PV is the present value, r is the annual interest rate, and n is the number of years. Plugging in the values:

FV = 12654 × (1 + 0.0475)^150 = $63,661.36

Therefore, the city of Springfield will receive approximately $63,661.36 from Bob's generosity after 150 years.