Answer:
Total value in the account after 25 years = $105,530.26
Explanation:
The value of an amount invested at a certain rate of return for certain number of years where interest compounded annually is known as the future value.
The future value of an investment can be determined using the future value formula. This formula is stated below:
FV = PV × (1+r)^(n)
FV - Future Value , PV- Present Value, r-rate of return, n- number of years
<em>For the first compounding, 6.1% for 11 years</em>
<em>PV - 26,000, r- 6.1% and n- 11</em>
FV = 26,000 × (1.061)^11 = 49,870.367
<em>For the second round of compounding at 5.5% for 14 years</em>
<em>PV - </em> 49,870.367 , r -5.5%, n- 14
FV = 49,870.367× 1.055^14 = 105,530.259
Total value in the account after 25 years = $105,530.26
