Jasmine invests $2,717 . What will the account balance be after 20 years?

Question

Jasmine invests $2,717 in a retirement account with a fixed annual interest rate of 8% compounded 12 times per year. What will the account balance be after 20 years?

Answer 1

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

 

A: final amount

P: starting amount

r: interest rate change to a decimal

n: number of times compounded

t: time in years

 

A = 2717(1 + (.08/12))^12*20

A = 2717(1.0067)^240

A = 2717*4.9268

A = 13,386.12