Robin, who is self-employed, contributes $5,500/year into a Keogh account. How much will he have in the account after 15 years if the account earns interest at the rate of 8.5%/year compounded yearly?
We can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where A is the final amount, P is the initial principal, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.
In this case, we have P = $5,500, r = 8.5%, n = 1 (compounded yearly), and t = 15:
A = 5500(1 + 0.085/1)^(1*15)
A = $16,837.27
Therefore, after 15 years, Robin will have $16,837.27 in his Keogh account.