Chris invested $15000 in a retirement account with an annual interest rate of 3.4%. Find the final amount of the investment after 27years if interest is compound quarterly. Round to the nearest cent

Answer 1

To find the final amount of the investment after 27 years, we can use the compound interest formula:

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

Where:
A = the final amount of the investment
P = the principal (initial investment) = $15000
r = annual interest rate = 3.4% = 0.034 (as a decimal)
n = number of times interest is compounded per year = 4 (quarterly)
t = number of years = 27

Plugging in the values:

A = 15000(1 + 0.034/4)^(4*27)

Simplifying further:

A = 15000(1.0085)^(108)

Using a calculator to find the value of (1.0085)^(108), we get approximately 1.89286919.

A ≈ 15000(1.89286919)

A ≈ 28393.04

Therefore, the final amount of the investment after 27 years if interest is compounded quarterly is approximately $28,393.04.