Question

Daniel invests $2,037 in a retirement account with a fixed annual interest rate of 6% compounded 6 times per year. What will the account balance be after 16 years?

Answer 1

Answer:

$\ 5294.72$

Step-by-step explanation:

GIVEN: Daniel invests $\ 2,037$ in a retirement account with a fixed annual interest rate of $6\%$ compounded $6$ times per year.

TO FIND: What will the account balance be after $16$ years

SOLUTION:

Amount invested by Daniel $=\ 2037$

Annual interest rate $=6\%$      

Total amount generated by compound interest is  $=P(1+\frac{r}{n})^n^t$

Here Principle amount $P=\ 2037$

rate of interest $r=6\%$

number of times compounding done in a year $n=6$

total duration of time $nt=16\text{ years}$

putting values we get

=$2037(1+\frac{6}{6\times100})^1^6$

$=2037(\frac{101}{100})^1^6$

$=\ 5294.72$

Hence the total balance after $16\text{ years}$ will be $\ 5294.72$