Question

You invest $2500 in an account earning 3.5%, compounded annually. You don't make any other deposits or withdrawals until the 9th year when you withdraw all of the money in the account. How much do you receive?

(a) $2,833.78
(b) $3,201.42
(c) $3,568.18
(d) $3,959.15

Answer 1

The amount you would receive after 9 years is $3,421.42, when $2,500 is invested at an annual interest rate of 3.5%, compounded annually. This calculation uses the compound interest formula, and the result is not matching any of the provided options, which could indicate an error in the question or the answer choices. final answer is option A.

Step-by-step explanation:

To determine how much money you will receive after investing $2,500 in an account earning 3.5%, compounded annually for 9 years, we use the formula for compound interest, which is:

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.

Substituting the given values into the formula gives us:

A = 2500(1 + 0.035/1)1*9 = 2500(1 + 0.035)9

Now, performing the calculations:

A = 2500(1.035)9

A = 2500 * 1.368569

A = $3,421.42

Therefore, after 9 years, you would receive $3,421.42, which is not one of the options provided, suggesting a possible miscalculation in the options or a typo in the question.