A retirement account is opened with an initial deposit of $6,500 and earns 6.15% interest compounded monthly. What will the account be worth in 35 years? (Round your answer to the nearest cent.)

Question

A retirement account is opened with an initial deposit of $6,500 and earns 6.15% interest compounded monthly. What will the account be worth in 35 years? (Round your answer to the nearest cent.)

Answer 1

general formula is

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

where r = interest rate = 6.15% = .0615

n= number of compounding periods per year= 12 for monthly compounding

t = number of years = 35

P = starting amount = $6500

A = ending amount

A= 6,500(1+.0615/12)^12(35)

use a calculator

A= 6,500(1.005125)^420

A= ever slightly more than $55,634.59 rounded off to nearest cent