As a savings plan for college, when their son Bill was born, the Johnson's deposited $10,000 in an account paying 4% compounded quarterly. How much is this account when Bill is 18 years old?

What is 10000(1.01)^72 ?

To calculate the final amount in the account when Bill is 18 years old, we need to use the formula for compound interest:

Final Amount = Principal * (1 + (Interest Rate / Number of Compounding Periods))^(Number of Compounding Periods * Number of Years)

In this case, the Principal is $10,000, the Interest Rate is 4% (or 0.04 as a decimal), and the account compounds quarterly. Bill will be 18 years old, so the Number of Years is 18.

Let's break down the formula and calculate the final amount:

1 + (Interest Rate / Number of Compounding Periods)
= 1 + (0.04 / 4)
= 1 + 0.01
= 1.01

Number of Compounding Periods * Number of Years
= 4 * 18
= 72

(1.01)^72
≈ 2.20804

Final Amount = Principal * (1.01)^72
= $10,000 * 2.20804
≈ $22,080.40

The account will be approximately $22,080.40 when Bill is 18 years old.