Question

Your 401(k) retirement account is currently worth $55,000. Assuming no more contributions, what will your account be worth in 20 years at an annual rate of 10.5%?
N= I/Y= PV= PMT= FV= P/Y=

Answer 1

Answer:

Your account is going to be worst $405,142.92

Step-by-step explanation:

This is a compound interest problem.

The compound interest formula is given by:

$A = P(1 + \frac{r}{n})^{nt}$

Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.

So, for this problem:

We want to find A

$P = 55,000$

$n = 1$

$r = 0.105$

$t = 20$

$A = P(1 + \frac{r}{n})^{nt}$

$A = 55000(1 + \frac{0.105}{1})^{20}$

$A = 405,142.92$

Your account is going to be worst $405,142.92