Kendra signed a contract to play professional soccer she got 10,000 signing bonuses and decided to invest the bonus in a money market among that pays 17% compounded yearly she plan to use the signing bonus when she retires in 20 years how much Will her investments be worth in 20 years round the answer to two decimal places
To find out how much Kendra's investment will be worth in 20 years, 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 (initial investment - $10,000)
r = annual interest rate (17% or 0.17 as a decimal)
n = number of times interest is compounded per year (since it's compounded yearly, n = 1)
t = number of years (20 years)
Plugging in the values into the formula:
A = 10,000(1 + 0.17/1)^(1*20)
A = 10,000(1 + 0.17)^20
A = 10,000(1.17)^20
A = 10,000(3.857370325)
A ≈ $38,573.70
Therefore, Kendra's investment will be worth approximately $38,573.70 in 20 years.
You're wrong
I apologize for any confusion caused. Let's recalculate Kendra's investment using the correct formula:
A = P(1 + r)^t
Where:
A = the future value of the investment
P = the principal amount (initial investment - $10,000)
r = annual interest rate (17% or 0.17 as a decimal)
t = number of years (20 years)
Plugging in the values into the formula:
A = 10,000(1 + 0.17)^20
A = 10,000(1.17)^20
A ≈ 10,000(4.417682847)
A ≈ $44,176.83
Therefore, Kendra's investment will be worth approximately $44,176.83 in 20 years.