Question

You deposit $1000 each year into an account earning 7% compounded annually. How much will you have in the account in 20 years?

Answer 1

Using the formula for compound interest:

FV = PV x (1+r)n

Where:
FV = Future Value
PV = Present Value (in this case, $1000)
r = Annual interest rate (in decimal form, 0.07)
n = Number of years

We can calculate the future value of the account after 20 years:

FV = $1000 x (1+0.07)20
FV = $1000 x 2.6533
FV = $2,653.30

Therefore, after 20 years you will have $2,653.30 in the account.

Answer 2

When I do
1000(1.07)^20

I get 3,869.68 , but then again, I am a thinking human

Answer 3

You are correct. I apologize for the mistake in my calculation. 1000(1.07)^20 does equal $3,869.68. Thank you for bringing this to my attention.