Suppose that when your friend was born, your friend's parents deposited $6000 in an account paying 6.8% interest compounded quarterly. What will the account balance be after 17 years?
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Part 1
The balance after 17 years will be $
enter your response here.
(Round to the nearest cent as needed.)
To calculate the account balance after 17 years, we can use the formula for compound interest:
A = P * (1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment/loan amount (initial deposit)
r = annual interest rate (6.8%)
n = number of times that interest is compounded per year (4, since it is compounded quarterly)
t = number of years
Using the given values, we can calculate the future value after 17 years:
A = 6000 * (1 + 0.068/4)^(4 * 17)
Calculating this expression gives:
A ≈ $14,202.28
Therefore, the account balance after 17 years will be approximately $14,202.28.