Question

$1 050 at 6% for 25 years compounded annually

Answer 1

18 900  6% on 25 years compounded annually

Answer 2

The formula for compound interest is $A = P(1 + r/n)^{(nt)}$

In this formula:
A = the future value of the investment/loan, including interest
P = the initial deposit or loan amount
r = the annual interest rate as a decimal
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for


To solve, first substitute: $A = 1050(1 + 0.06/1)^{(1*25)}$

Then simplify: $A = 1050(1.06)^{(25)} \\ A = 1050(4.29) \\ A=4506.46$



After 25 years the value of the investment/loan will be $ 4506.46.