2) Amanda invests $6,540 in a retirement

account with a fixed annual interest rate of

5% compounded 6 times per year. What will

the account balance be after 20 years?

A) $16,031.88 B) $17,704.05

C) $15,329.01 D) $16,844.10

Question

Gianna Anderson

Mathematics

27 August, 14:19

2) Amanda invests $6,540 in a retirement

account with a fixed annual interest rate of

5% compounded 6 times per year. What will

the account balance be after 20 years?

A) $16,031.88 B) $17,704.05

C) $15,329.01 D) $16,844.10

+2

Answers (1)

Know the Answer?

Albert Potts · Answer 1

B) $17,704.05

Step-by-step explanation:

20 years later is a time in the future so you use Future value formula;

FV = PV * (1+r) ^t

where PV = Amount invested in the present = $6,540

r = discount rate = (5% / 6) = 0.833% or 0.00833

t = total duration = 20 * 6 = 120

Next, plug in the numbers into the formula;

=6,540 * (1+0.00833) ^120

=6,540 * 2.707041491

= 17,704.05

2) Amanda invests $6,540 in a retirementaccount with a fixed annual interest rate of5% compounded 6 times per year. What willthe account balance be after 20 years?A) $16,031.88 B) $17,704.05C) $15,329.01 D) $16,844.10

2) Amanda invests $6,540 in a retirement

account with a fixed annual interest rate of

5% compounded 6 times per year. What will

the account balance be after 20 years?

A) $16,031.88 B) $17,704.05

C) $15,329.01 D) $16,844.10