how much is in the account now?

Question

someone opened an account with $2,500 18 years ago at a 2.8% interest rate, compounded annually. how much is in the account now?

Answer 1

Hi Nikole,

 

   someone opened an account with $2,500 18 years ago at a 2.8% interest rate, compounded annually. how much is in the account now?

 

The compound interest formula is

 

A=P[1 +r/n]^nt

 

 

P=2500

t=18 yrs

r=2.8% which in a decimal is .028

n=1 since it is compounded annually

 

Substitute in the values

A=2500[1+.028]¹⁸

A=2500[1.028]¹⁸    use calculator

A=4109.76

 

ANSWER:  The amount he has now is $4109.76

 

We're finished