To calculate Annie's final amount after 20 years of investment, we can use the formula for compound interest:
A = P (1 + r/n)^(nt)
Where:
A = the final amount
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
Here, Annie's principal amount (P) is $7000, the annual interest rate (r) is 3.3% or 0.033, the number of times interest is compounded per year (n) is 4 (quarterly compounded), and the number of years (t) is 20.
Plugging in these values into the formula:
A = 7000(1 + 0.033/4)^(4 * 20)
A = 7000(1.00825)^(80)
Using a calculator or software to handle the power, we find that (1.00825)^(80) ≈ 1.776015.
A = 7000 * 1.776015
A ≈ $12,432.11
Therefore, Annie's final amount after 20 years of investment, rounded to the nearest cent, is $12,432.11.
Any invest $7000 into a retirement account with a compounded interest rate of 3.3% compounded quarterly what is Annie’s final amount after 20 years of investment round the answer to the nearest cent
1 answer
1 answer