Contribute $4500/year into a Keogh account. How much $ after 25 years if the account earns interest at the rate of 2.5%/year compounded yearly? (Round your answer to the nearest cent.)

Question

Robin, who is self-employed, contributes $4500/year into a Keogh account. How much will he have in the account after 25 years if the account earns interest at the rate of 2.5%/year compounded yearly? (Round your answer to the nearest cent.)

Id be greatful for any help.

Answer 1

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

A amount accrued =unknown

P deposit/investment/prinipal = $4500

r rate = 2.5% =0.025

n= times compounded each year=1

k= n*t = 1*25 = 25

t= time in years = 25

A = 4500(1 + .025/1)^25= $8,342.75