To find the final amount after 27 years, we will 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 (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for
Given:
P = $15,000
r = 3.4% = 0.034 (annual interest rate in decimal form)
n = 4 (quarterly compounding)
t = 27 years
Substituting these values into the formula, we get:
A = 15000(1 + 0.034/4)^(4*27)
Calculating this expression, we find:
A ≈ $32,417.22
Rounding this value to the nearest cent, the final amount of the investment after 27 years is $32,417.22.
Chris invests $15,000 in a retirement account with an annual interest rate of 3.4%. Find the final amount of the investment after 27 years if interest is compounded quarterly. Round the answer to the nearest cent
1 answer