An Individual Retirement Account (IRA) has 17000 $ in it, and the owner decides not to add any more money to the account other than interest earned at 6% compounded daily. How much will be in the account 25 years from now when the owner reaches retirement age?

Question

An Individual Retirement Account​ (IRA) has 17000 ​$ in​ it, and the owner decides not to add any more money to the account other than interest earned at ​6% compounded daily. How much will be in the account 25 years from now when the owner reaches retirement​ age?

GPT 3.5 · Answer

To find the final amount in the account after 25 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = final amount
P = principal (initial amount)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years

Given:
P = $17,000
r = 6% or 0.06 (decimal form)
n = 365 (compounded daily)
t = 25 years

Plugging in the values:

A = 17000(1 + 0.06/365)^(365*25)
A = 17000(1 + 0.000164)^9125
A ≈ 17000(1.000164)^9125
A ≈ 17000(2.781318052)
A ≈ $47,295.31

Therefore, there will be approximately $47,295.31 in the account 25 years from now when the owner reaches retirement age.

An Individual Retirement Account​ (IRA) has 17000 ​$ in​ it, and the owner decides not to add any more money to the account other than interest earned at ​6% compounded daily. How much will be in the account 25 years from now when the owner reaches retirement​ age?

An Individual Retirement Account (IRA) has 17000 $ in it, and the owner decides not to add any more money to the account other than interest earned at 6% compounded daily. How much will be in the account 25 years from now when the owner reaches retirement age?