Question

Derek will deposit $3,680.00 per year for 26.00 years into an account that ears 4.00%. The first deposit is made next year. How much will be in the account 26.0 years from today?

Answer 1

To calculate the amount in the account after 26 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt). Substituting the given values, the future value of the account is $141,309.40.

Step-by-step explanation:

To calculate the amount that will be in the account 26 years from today, we can use the formula for compound interest:

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

Where:

• A is the future value of the account
• P is the principal amount deposited per year ($3,680.00)
• r is the annual interest rate (4% or 0.04)
• n is the number of times interest is compounded per year (assuming it's compounded annually)
• t is the number of years

Substituting the given values into the formula, we get:

A = 3680(1 + 0.04/1)^(1*26)

Calculating this, the future value of the account after 26 years would be approximately $141,309.40.