Answer:
To calculate the future value of your account, you can use the formula for compound interest:
\[ A = P \times (1 + r/n)^{nt} \]
Where:
- A is the future value of the account
- P is the principal amount (initial deposit)
- r is the annual interest rate (as a decimal)
- n is the number of times the interest is compounded per year
- t is the number of years
In this case, you deposit $4000 each year, so your principal (P) is $4000. The annual interest rate (r) is 8% or 0.08, and it is compounded annually (n = 1). You want to know the value after 30 years (t = 30).
Using the formula, we can calculate the future value:
\[ A = 4000 \times (1 + 0.08/1)^{(1 \times 30)} \]
Simplifying the expression inside the parentheses:
\[ A = 4000 \times (1.08)^{30} \]
Using a calculator or spreadsheet, you can evaluate this expression to find the future value.
After 30 years, you will have approximately $26,756.60 in the account.
Explanation:
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