Question

On her 30th birthday, Ann Marie opened a new compound interest account with $25,000

Answer 1

Answer:

On her 60th birthday, she would have earned $83048.5.

Step-by-step explanation:

The formula to calculate the compound interest is:

$A=P(1+\frac{r}{100} )^{n}$  --- (1)

where A is Principal and interest, r is the rate of interest and n is the number of years compounded.

For our problem,

P = 25000,

r = 0.05 and

n = 60 - 30 = 30

Substitute these values in (1), we get,

$A=25000(1+0.05)^{30}$

$=25000(1.05)^{30}$

= 25000(4.32194)

= 108048.5

Compound Interest = Amount - Principal

= 108048.5 - 25000

= 83048.50

Hence, on her 60th birthday, she would have earned $83048.5.

Answer 2

Answer:

The interest in 30 years be 8305000 cent.

Step-by-step explanation:

Formula

$Amount = P(1+r)^{t}$

Where P is the principle , r is the rate of interest in the decimal form and t is the time.

As given

On her 30th birthday, Ann Marie opened a new compound interest account with $25,000.

The account pays 5% interest annually.

If Ann Marie retires on her 60th birthday and close the account at that time .

P = $25000

5% is written in the decimal form.

$= \frac{5}{100}$

= 0.05

r = 0.05

As  Ann Marie open account on his 30 th birthday and close it at its 60 th birthday .

Thus

t = 60 - 30

t = 30 years

Put all the value in the formula

$Amount = 25000(1+0.05)^{30}$

$Amount = 25000(1.05)^{30}$

$Amount = 25000\times 4.322 (Approx)$

$Amount = \ 108050$

As

Amount = Principle + Interest

Putting the value

$108050 = $25000+ Interest

$108050 - $25000 = Interest

Interest = $83050

As 1 dollar = 100 cent

Convert $83050 convert into cent .

$83050 = 83050 × 100

             = 8305000 cent.

Therefore the interest in 30 years be 8305000 cent.