Question

Calculate the ending balance of investing $18,000 at 9% Annual Compound Interest for 20 years.

Answer 1

Answer: $100,879.39

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

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

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = 18000

r = 9% = 9/100 = 0.09

n = 1 because it was compounded once in a year.

t = 20 years

Therefore,

A = 18000(1+0.09/1)^1 × 20

A = 18000(1.09)^20

A = $100,879.39