Question

A grandmother deposited $4,000 in an account that pays 5% per year compounded annually when her granddaughter was born. What will the value of the account be when the granddaughter reaches her 13th birthday?

Answer 1

A = P (1 + r/n)^nt
A = 4000(1 + 0.05/1)^(13)(1)
A = $7542.59