Question

Assume you deposit $4,300 at the end of each year into an account paying 10.25 percent interest.

a. How much money will you have in the account in 23 years?
b. How much will you have if you make deposits for 46 years?

Answer 1

The amount of money in the account after 23 years is approximately $39,975.61. After 46 years, the amount is approximately $181,132.42.

Step-by-step explanation:

To calculate the amount of money in the account, we can use the formula for compound interest:

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

Where A is the final amount, P is the principal (initial deposit), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

a. Using the given values, we have P = $4,300, r = 10.25%, n = 1, and t = 23. Plugging in these values into the formula, we get:

A = 4300(1 + 0.1025/1)^(1*23) = $39,975.61

Therefore, you will have approximately $39,975.61 in the account after 23 years.

b. For 46 years, we can use the same formula with t = 46:

A = 4300(1 + 0.1025/1)^(1*46) = $181,132.42

Therefore, you will have approximately $181,132.42 in the account after 46 years.