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4 February, 07:49

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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  1. 4 February, 10:51
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    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
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