Question Kendra signed a contract to play professional soccer. She got a $100,000 signing bonus, and she decided to invest the bonus in a money market account that pays 15% interest compounded yearly. She plans to use the signing bonus when she retires in 20 years. How much will her investment be worth in 20 years? Round the answer to two decimal places.(1 point
To calculate the future value of Kendra's investment, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
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, P = $100,000, r = 0.15, n = 1 (compounded yearly), and t = 20.
Plugging in the values, we get:
A = 100,000(1 + 0.15/1)^(1*20)
= 100,000(1 + 0.15)^20
= 100,000(1.15)^20
≈ 1,169,858.94
So, her investment will be worth approximately $1,169,858.94 in 20 years.