To prepare for retirement, Chris invests $15,000 with a simple interest rate of 4.8%. Find the final amount of Chris's investment if he invests this amount for the next 30 years. Round the answer to two decimal places as needed.
The formula for calculating simple interest is:
A = P(1 + rt)
where:
A = the final amount
P = the principal amount (the initial investment)
r = the interest rate (in decimal form)
t = the time (in years)
In this case:
P = $15,000
r = 4.8% = 0.048 (converted to decimal form)
t = 30 years
Plugging in these values into the formula, we get:
A = 15,000(1 + 0.048 * 30)
A = 15,000(1 + 1.44)
A = 15,000(2.44)
A = $36,600
Therefore, the final amount of Chris's investment after 30 years will be $36,600.
Anne invests $7000 into a retirement account with a compound interest rate of 3.3% compounded quarterly. What is Anne's final amount after 25 years of investment? Round the answer to the nearest cent.
The formula for calculating compound interest is:
A = P(1 + r/n)^(nt)
where:
A = the final amount
P = the principal amount (the initial investment)
r = the interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the time (in years)
In this case:
P = $7000
r = 3.3% = 0.033 (converted to decimal form)
n = 4 (quarterly compounding)
t = 25 years
Plugging in these values into the formula, we get:
A = 7000(1 + 0.033/4)^(4*25)
A = 7000(1.00825)^(100)
A ≈ $14,104.85
Therefore, Anne's final amount after 25 years of investment will be approximately $14,104.85.