1. Cecilia's grandfather set up a savings account for her with a $25,000 gift when she was born. The account accumulated interest annually at a rate of 6% per year and no other deposits were made to the account. Cecilia is 21 years old today. To date, how much has accumulated in the account?

Question

Freddy

Business

26 August, 11:56

1. Cecilia's grandfather set up a savings account for her with a $25,000 gift when she was born. The account accumulated interest annually at a rate of 6% per year and no other deposits were made to the account. Cecilia is 21 years old today. To date, how much has accumulated in the account?

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Answers (1)

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Mattie · Answer 1

The accumulated amount in the account = $84,989.09

Explanation:

The amount that has been accumulated in the account is the future value of 25,000 invested invested at 6% interest compounded annually.

FV = PV * (1+r) ^n

Future Value (FV) = ?, Present Value (PV) - 25,000, rate (r) - 6%, number of years (n) - 21

FV = 25,000 * (1.06) ^21

FV = $84,989.09

The accumulated amount in the account = $84,989.09