Felicia invested $25,000 into an account earning 3% annual interest compounded quarterly. She makes no other deposits into the account and does not withdraw any money.
What is the balance of Felicia's account in 9 years?
To calculate the balance of Felicia's account in 9 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years
P = the principal amount (initial investment)
r = annual interest rate (in decimal form)
n = number of times the interest is compounded per year
t = number of years
In this case:
P = $25,000
r = 0.03 (3% annual interest rate)
n = 4 (interest compounded quarterly)
t = 9 years
A = $25,000(1 + 0.03/4)^(4*9)
A = $25,000(1 + 0.0075)^36
A = $25,000(1.0075)^36
A = $25,000(1.35175)
A = $33,793.75
Therefore, the balance of Felicia's account in 9 years will be approximately $33,793.75.