Question

Eloise is investing in a retirement account. She plans on adding an additional $50 at the end of every year and the expected rate of return is 3% of the amount invested, calculated at the end of the month. If she starts with $1000 in the account how much money will she have one year after she started the investment?

Answer 1

The amount of money she have one year after she started the investment = 1000((1 + r/t)^nt - 1) / (r/t); where r = 3% = 0.03, t = 12 and n = 1 year.
Amount = 1000((1 + 0.03/12)^(1 x 12) - 1) / (0.03 / 12) = 1000((1 + 0.0025)^12 - 1) / (0.03 / 12) = 1000((1.0025)^12 - 1) / 0.0025 = 1000(1.0304 - 1) / 0.0025 = 12,166.38
Therefore, the amount she has in her bank account at the end of the year is $12,166.38

Answer 2

Answer:

A) $1475.76

Step-by-step explanation: