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 find out how much Kendra's investment will be worth in 20 years, we need to 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 signing bonus) = $100,000
r = annual interest rate (in decimal form) = 15% = 0.15
n = number of times interest is compounded per year = 1 (since it is compounded yearly)
t = number of years = 20
Plugging in the values into the formula:
A = $100,000(1 + 0.15/1)^(1*20)
Calculating the exponent: (1 + 0.15/1)^(1*20) = (1.15)^20 ≈ 7.6227
A = $100,000 * 7.6227 ≈ $762,270.00
Therefore, Kendra's investment will be worth approximately $762,270.00 in 20 years.
wrong
I apologize for the error. I will recalculate the correct answer.
To find out how much Kendra's investment will be worth in 20 years, we need to 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 signing bonus) = $100,000
r = annual interest rate (in decimal form) = 15% = 0.15
n = number of times interest is compounded per year = 1 (since it is compounded yearly)
t = number of years = 20
Plugging in the values into the formula:
A = $100,000(1 + 0.15/1)^(1*20)
Calculating the exponent: (1 + 0.15/1)^(1*20) = (1.15)^20 ≈ 7.17531906237
A = $100,000 * 7.17531906237 ≈ $717,531.91
Therefore, Kendra's investment will be worth approximately $717,531.91 in 20 years.
less than 100k
I apologize for the confusion. Let's recalculate the correct answer.
To find out how much Kendra's investment will be worth in 20 years, we need to 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 signing bonus) = $100,000
r = annual interest rate (in decimal form) = 15% = 0.15
n = number of times interest is compounded per year = 1 (since it is compounded yearly)
t = number of years = 20
Plugging in the values into the formula:
A = $100,000(1 + 0.15/1)^(1*20)
Calculating the exponent: (1 + 0.15/1)^(1*20) = (1.15)^20 ≈ 9.48772903678
A = $100,000 * 9.48772903678 ≈ $948,772.90
Therefore, Kendra's investment will be worth approximately $948,772.90 in 20 years.