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You are twenty years old and are considering depositing $1,500 into a savings account that will pay 6% annually. When you cash out your account at age 65, how much of it will be compound interest
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5 votes
You are twenty years old and are considering depositing $1,500 into a savings account that will pay 6% annually. When you cash out your account at age 65, how much of it will be compound interest

User Jay Chakra
by
5.1k points

1 Answer

5 votes

Answer:

$20,646.92

Step-by-step explanation:

We are to calculate the future value of the amount :

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value

P = Present value

R = interest rate

N = number of years = 65 - 20 = 45

$1500(1.06)^45 = $20,646.92

User Methkal Khalawi
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5.0k points
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