Question

Jennifer invests $8,353 in a retirement account with a fixed annual interest rate of8% compounded 4 times per year. What will the account balance be after 15 years?

Answer 1

Amount after 15 years = $27,406.45 (Approx.)

Explanation:

Given:

Amount invested p = $8,353

Rate r = 8% = 0.08/4 = 0.02 per year (4 times)

Number of interest compounded n = 15 year x 4 = 60 times

Find:

Amount after 15 years

Computation:

A = p[1+r]ⁿ

Amount after 15 years = 8,353[1+0.02]⁶⁰

Amount after 15 years = 8,353[1.02]⁶⁰

Amount after 15 years = $27,406.45 (Approx.)