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Samanthaʹs savings account has a balance of $4643. After 25 years, what will the amount of interest be at 6% compounded annually?

User Redsandro
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1 Answer

3 votes

Answer:

$15,284

Step-by-step explanation:

First, you have to use the formula to calculate the future value to calculate the amount that Samantha will have after 25 years:

FV=PV*(1+r)^n

FV= future value

PV= present value= $4,643

r= rate of interest= 6%

n= number of periods of time=25

Now, you can replace the values in the formula:

FV=4,643*(1+0.06)^25

FV=4,643*(1.06)^25

FV=19,927

Then, you have to subtract the present value from the future value to find the amount of interest after 25 years:

19,927-4,643= 15,284

According to this, the amount of interest at 6% compounded annually after 25 years will be $15,284.

User Nicodjimenez
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