If $635 is invested in an account that earns 9.25%, compounded annually, what will the account balance be after 21 years?
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The formula is here.
amount = 635(1.0925)^21 = .....
you do the button-pushing.
To calculate the account balance after 21 years, we need to apply the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the account balance
P = the principle amount (initial investment)
r = the annual interest rate (expressed as a decimal)
n = the number of times the interest is compounded annually
t = the number of years the money is invested for
In this case:
P = $635
r = 9.25% = 0.0925 (convert the percentage to decimal)
n = 1 (compounded annually)
t = 21 years
Plugging in the values:
A = 635(1 + 0.0925/1)^(1*21)
A = 635(1 + 0.0925)^21
A = 635(1.0925)^21
A ≈ $2,676.80
Therefore, the account balance after 21 years would be approximately $2,676.80.