Question

Suppose an individual's retirement account with a balance of $165,000 is transferred to a new investment plan that pays 8% interest compounded annually. How much will the account be worth after 3 years? (Remember, the formula is A = P(1 + r)t.)

Answer 1

Answer:

$A=\ 207,852.48$  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=3\ years\\ P=\ 165,000\\ r=0.08\\n=1$  

substitute in the formula above  

$A=\ 165,000(1+\frac{0.08}{1})^{1*3}=\ 207,852.48$