If $64,000 is invested in an IRA account with an annual interest rate of 8% compounded once a year, what is the value of the account after 6 years? Round your answer to two decimal places.

Answer: the value of the account after 6 years is $101559.96

Step-by-step explanation:

If $64,000 is invested in an IRA account, then

Principal = $64,000

So P = 64,000

The rate at which $64000 was compounded is 8%

So r = 8/100 = 0.08

If it is compounded once in a year, this means that it is compounded annually (and not semi annually, quarterly or others). So

n = 1

We want to determine the value of the account after 6 years, this means

time, t = 6

Applying the compound interest formula,

A = P (1 + r/n) ^nt

A = amount after n number of years

A = 64000 (1 + 0.08/1) ^1*6

A = 64000 (1.08) ^6

A = 64000*1.58687432294

A = 101559.956668416

Approximately $101559.96 to 2 decimal places