I already posted this question, I just wanted to clarify my answer.
Problem: When Frederick was born, his grandparents gave hime a gift of $2000, which was invested at an interest rate of 5% per year, compounded yearly. How much money will Frederick have when he collects the money at the age of 18? gGive your answer to the nearest hundreth of a dollar.
Response: Steve: 2000(1+.05)^18
My answer: 4183.24
The answer is 2813.24 ur close
To calculate the amount of money Frederick will have when he collects the money at the age of 18, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount of money
P = the principal amount (the initial investment)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case, the principal amount is $2000, the annual interest rate is 5% (or 0.05 as a decimal), the interest is compounded yearly (so n is 1), and the number of years is 18. Plugging these values into the formula, we can calculate the final amount:
A = 2000(1 + 0.05/1)^(1*18)
A = 2000(1 + 0.05)^18
A = 2000(1.05)^18
A ≈ 4183.32
Rounded to the nearest hundredth of a dollar, Frederick will have approximately $4183.32 when he collects the money at the age of 18. Therefore, your calculation of $4183.24 is incorrect.