Answer:
Step-by-step explanation:
Initial amount that Clarence deposited into the account is $175,000 This means that the principal,
P = 175000
It was compounded annually. This means that it was compounded once in a year. So
n = 1
The rate at which the principal was compounded is 7.25%. So
r = 7.25/100 = 0.0725
It was compounded for x years. So
t = x
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of x years. Therefore
A = 175000 (1+0.0725/1)^1×x
A = 175000(1.0725)^x
The amount of money that he will have in his account after 20 years would be
A = 175000(1.0725)^20
A = $709552
