Anne's final amount after 25 years of investment can be calculated using the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount after t time
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
Using the given information:
P = $7,000
r = 3.3% = 0.033 (expressed as a decimal)
n = 4 (quarterly compounding)
t = 25
Plugging in the values, we have:
A = 7000(1 + 0.033/4)^(4*25)
A = 7000(1 + 0.00825)^(100)
A ≈ 7000(1.00825)^100
A ≈ 7000(1.960993831)
A ≈ $13,726.96
Therefore, Anne's final amount after 25 years of investment is approximately $13,726.96.
Anne invests $7,000 into a retirement account with a compound interest rate of 3.3% compounded quarterly. What is Anne's final amount after 25 years of investment? Round the answer to the nearest cent. (1 point)
1 answer