Question

When Mai turned 21, she invested $2000 in an Individual Retirement Account (IRA) that has grown at a rate of 10% compounded annually. If the account continues to grow at that rate, what will be its value when Mai turns 25?​

Answer 1

well, Mai is 21 today and when she's 25 is 4 years from now, so

$~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\ 2000\\ r=rate\to 10\%\to \frac{10}{100}\dotfill &0.10\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &4 \end{cases} \\\\\\ A=2000\left(1+\frac{0.10}{1}\right)^{1\cdot 4}\implies A=2000(1.1)^4\implies A=2928.2$