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)
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To find the amount 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 initial principal (signing bonus)
r = annual interest rate (15% or 0.15)
n = the number of times interest is compounded per year (1)
t = the number of years (20)
Substituting the values into the formula:
A = 100,000(1 + 0.15/1)^(1*20)
A = 100,000(1 + 0.15)^20
A = 100,000(1.15)^20
A ≈ 100,000(8.137556)
A ≈ 813,755.60
Therefore, Kendra's investment will be worth approximately $813,755.60 in 20 years.