Question

You deposit $3000 each year into an account earning 6% interest compounded annually. How much will you have in the account in 30 years?

Answer 1

$232,241.07

Explanation:

To calculate the total amount in the account after 30 years of depositing $3,000 each year and earning 6% interest compounded annually, we can use the formula for the future value of an annuity:

FV = P * (((1 + r)^n - 1) / r)

where:

FV is the future value of the annuity

P is the periodic payment (in this case, $3,000 per year)

r is the interest rate per compounding period (in this case, 6% per year, compounded annually)

n is the number of compounding periods (in this case, 30 years)

Substituting the given values, we get:

FV = $3,000 * (((1 + 0.06)^30 - 1) / 0.06)

Using a calculator, we get:

FV ≈ $232,241.07

Therefore, the total amount in the account after 30 years, rounded to the nearest cent, is $232,241.07.