Rosy deposits $25,000 into an investment account with an annual rate of 3.5% compounded annually. The amount in her account can be determined by the formula A = P(1 + r) t, where P is the amount deposited, r is the annual interest rate, and t is the time taken. If she makes no other deposits or withdrawals, how much money will be in her account at the end of 15 years?

ANSWERS

2017-08-21 02:43:17

First, we have our basic equation A = P(1 + r)^t A = Amount after t time periods P = Principle (Starting amount) = 25000 t = time periods (in this case, years since its compounded annually) = 15 r = annual interest rate = .035 Plug and chug! A = P(1 + r)^t A = 25000 (1 + .035)^15 A = 25000 (1.035)^15 A = $41,883.72

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