Question

Determine the final amount after 20 years with a 5% annual interest rate if:you invest $10 000 in an account that earns compound interest (compounded quarterly)

Answer 1

Answer:

$27,014.85

Step-by-step explanation:

We're gonna use the compound interest formula: P = A(1 + r/n)^nt

P = final amount

A = starting amount (10,000)

r = rate (0.05)

n = times applied (4 since it's quarterly)

t = years (20)

P = 10,000(1 + 0.05/4)^4*20

P = 10,000(1.0125)^80

P = 27,014.84940753337

Round it to just 27,014.85