Any invest $7000 into a retirement account with a compound interest rate of 3.3% compounded quarterly what is Annie’s final amount after 25 years of investment around the answer to nearest cent
To calculate Annie's final amount after 25 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Final amount
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years
Given:
P = $7000
r = 3.3% = 0.033 (converted to decimal)
n = 4 (compounded quarterly)
t = 25 years
Plugging in the values into the formula:
A = 7000(1 + 0.033/4)^(4*25)
Simplifying:
A = 7000(1 + 0.00825)^(100)
A = 7000(1.00825)^100
Calculating using a calculator or spreadsheet:
A ≈ 7000 * 2.182888813
A ≈ $15,280.21
Therefore, Annie's final amount after 25 years of investment is approximately $15,280.21.