Question

Greg budgeted carefully and by the time he turned 30 his retirement account balance was $22,000. If

that amount grew at a rate of 10% per year, how much would be in the account when he retired at age
65?

Answer 1

We have been given that Greg budgeted carefully and by the time he turned 30 his retirement account balance was $22,000. We are asked to find the amount in Greg's account after 60 years if the amount grew at a rate of 10% per year.

We will use exponential growth function to solve our given problem.

`y=a\cdot (1+r)^x`, where,

y = Final amount after t years,

a = Initial amount,

r = Growth rate in decimal form,

x = Time.

`10\%=(10)/(100)=0.10`

`y=\$22,000(1+0.10)^(65-30)`

`y=\$22,000(1.10)^(35)`

`y=\$22,000(28.1024368480642479)`

`y=\$618253.6106574\approx \$618,253.6`

Therefore, there will be approximately $618,253.6 in Greg's account.