To calculate the balance after nine years, we can use the formula for compound interest:
A = P*(1 + r/n)^(n*t)
Where:
A is the final balance
P is the principal amount (initial investment)
r is the annual interest rate (expressed as a decimal)
n is the number of times interest is compounded per year
t is the number of years
In this case:
P = $25,000
r = 6% = 0.06 (convert percent to decimal)
n = 1 (compounded annually)
t = 9 years
Plugging in the values into the formula:
A = 25000*(1 + 0.06/1)^(1*9)
A = 25000*(1 + 0.06)^9
A = 25000*(1.06)^9
A ≈ $40,079.50
Therefore, the balance after nine years will be approximately $40,079.50.
Suppose your friends parents invest $25,000 in an account paying 6% compound annually what will be the balance after nine years
1 answer
1 answer