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Wazin's parents invested $1500 in a mutual fund for his college that compounded

quarterly in 2006. How much money did he have in his colloge account in 2026 if the
rate was 7%?

User Stefan Arn
by
7.8k points

2 Answers

1 vote

Answer:

Explanation:

Principal amount, P= $1500 Rate of interest, r = 7%

User Archimaredes
by
7.8k points
7 votes

Answer:

$6133.19

Explanation:

We can use the formula for compound interest to find the amount of money in Wazin's college account in 2026:

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

where A is the amount of money in the account, P is the principal (initial investment), r is the interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the time (in years).

In this case, P = $1500, r = 0.07, n = 4 (since the interest is compounded quarterly), and t = 20 (since 2026 is 20 years after 2006). Substituting these values, we get:

A = 1500(1 + 0.07/4)^(4*20) = $6133.19

Therefore, Wazin's college account will have approximately $6133.19 in 2026.

Hope this helps!

User Mixkat
by
8.1k points