Question

On Maya's first birthday, her grandmother bought Maya a $15,000 treasury bond that earns an annual interest rate of 7.5%. On Maya's 26th birthday, the bond has matured. What is the final value of this bond? (5pts) 5) LeBron and Megan are saving for retirement. They are investing $5,000 each year in a retirement account earning 12.5% annual interest. How much will LeBron and Megan have total in their retirement account after 40 years of investing?

Answer 1

The final value of the bond is $76,127.91.

Step-by-step explanation:

To calculate the final value of a treasury bond, we need to use the formula for compound interest:

Final Value = Principal * (1 + Interest Rate)^Number of Years.

In this case, the principal is $15,000, the interest rate is 7.5%, and the number of years is 26. Plugging these values into the formula, we get:

Final Value = $15,000 * (1 + 0.075)^26 = $76,127.91

Therefore, the final value of the bond is $76,127.91.