Omar deposits $1,400 every year into an account earning an annual interest rate of 6.5% compounded annually. How much would he have in the account after 15 years, to the nearest dollar? Use the following formula to determine your answer.
The formula to calculate the future value of an investment with annual compounding is:
FV = P(1 + r)^n
Where:
FV = Future Value
P = Principal amount (initial deposit)
r = Annual interest rate (in decimal form)
n = Number of years
Plugging in the given values:
P = $1,400
r = 0.065
n = 15
FV = $1,400(1 + 0.065)^15
FV = $1,400(1.065)^15
FV ≈ $3,924.71
Therefore, after 15 years, Omar would have approximately $3,924 in the account.