Question

Jenna saves $2,500 per year in an account that earns 10% interest per year, compounded annually. Jenna will have saved in 30 years. Her account balance is a result of Jenna’s .

Answer 1

Answer:

$43,625

Step-by-step explanation:

Hello,

The question is a direct application of compound interest and we'll approach this question using the formula of compound interest.

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

A = compound interest

P = principal

r = rate of the interest

n = number of times compounded

t = time interval for the money to be compounded.

Data;

A = ?

P = $2,500

r = 10% = 0.1

n = 1 (since it's compounded annually)

T = 30 years

A = 2,500 [1 + (0.1 / 1)]^(1 × 30)

A = 2,500 × [1 + 0.1]³⁰

A = 2,500 × 1.1³⁰

A = 2,500 × 17.45

A = $43,625

In 30 years, Jenna would've saved $43,625