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Hello; this is my question... "Beth invests $2,704 in a retirement account with a fixed annual interest rate of 7% compounded 3 times per year. What will the account balance be after 18 years?"

1 Answer

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We would apply the formula for calculating compound interest which is expressed as

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

where

P represents the initial amount invested

A is the total amount after t years

n is the number of compounding periods in a year

t is the number of years

r is the interest rate

From the information given,

P = 2704

r = 7% = 7/100 = 0.07

n = 3

t = 18

By substituting these values into the formula, we have

A = 2704(1 + 0.07/3)^3 * 18

A = 2704(1.023)^54

A = 9232

The account balance after 18 years is $9232

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