Question

Evalusting a sovings poal Over the putt several years, Catherine Lee mas been able to save regulariy. As a result, fodar she has 156,519 in smingn and investments todoy. che wants to establsth her onn buviness in tive rears and fectr the mall need 1160,000 to do so. Use the following table to arswer the guestions. a. If ste can earn 6 F on her meney, how much will her 156,519 in swhow/westments be worth in five years? Round the answer to the fearest cene, Riound Fy.factor and FVA. factor to Bree dedimal places. Caladate viau aviner based on the FV-factor. 3 Cuculate wair anker bosed on the finendal calculate

Answer 1

Catherine's savings of $156,519 at a 6% annual interest rate compounded annually will grow to $209,377.68 in five years.

Step-by-step explanation:

To calculate how much Catherine Lee's savings of $156,519 will grow in five years with a 6% annual interest rate using compound interest, we use the formula:

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.

In this case, if the interest is compounded annually (n=1), then our formula simplifies to:

A = 156,519(1 + 0.06/1)^(1*5)

Calculating this we get:

A = 156,519(1 + 0.06)^5

A = 156,519(1.06)^5

A = 156,519 * 1.33822558

A = $209,377.68

Catherine will have $209,377.68 in her savings and investments in five years, assuming a 6% interest rate compounded annually.