Question

Mark invests $8,008 in a retirement account with a fixed annual interest rate of 2% compounded 6 times per year. What will the account balance be after 16 years?

Please help i need the answer by tomorrow!

Answer 1

Given:

Principal value = $8,008

Rate of interest = 2% compounded 6 times per year.

Time = 16 years

To find:

The account balance after 16 years.

Solution:

The formula for amount is:

$A=P\left(1+\dfrac{r}{n}\right)^{nt}$

Where, P is principal, r is the rate of interest, n is the number of times interest compounded in an year and t is the number of years.

Putting $P=8,008, r=0.02,n=6,t=16$ in the above formula, we get

$A=8008\left(1+\dfrac{0.02}{6}\right)^{6(16)}$

$A=8008\left(\dfrac{6.02}{6}\right)^{96}$

$A=11022.1721148$

$A\approx 11022.17$

Therefore, the account balance after 16 years is $11022.17.