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

Answer 1

To calculate the final amount after 25 years of investment, we can use the formula for compound interest:

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

Where:
A = the final amount
P = the initial investment
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of years

Plugging in the given values:
P = $7,000
r = 3.3% = 0.033 (as a decimal)
n = 4 (compounded quarterly)
t = 25 years

A = $7,000(1 + 0.033/4)^(4*25)
A = $7,000(1.00825)^(100)

Using a calculator, we find that (1.00825)^(100) ≈ 1.36864

A ≈ $7,000 * 1.36864
A ≈ $9570.47

Therefore, Anne's final amount after 25 years of investment is approximately $9,570.47.

Answer 2

wrong

Answer 3

Apologies for the mistake. Let's recalculate correctly.

P = $7,000
r = 3.3% = 0.033 (as a decimal)
n = 4 (compounded quarterly)
t = 25 years

A = P(1 + r/n)^(nt)
A = 7000(1 + 0.033/4)^(4*25)
A ≈ 7000(1 + 0.00825)^(100)

Using a calculator, we find that (1.00825)^(100) ≈ 2.2032

A ≈ 7000 * 2.2032
A ≈ 15422.40

Therefore, Anne's final amount after 25 years of investment is approximately $15,422.40