A grandmother deposited $5,000 in an account that pays 8% per year compounded annually when her granddaughter was born. What will the value of the account be when the granddaughter reaches her 16th birthday?
We have the accumulation function A(t) = 5,000(1.08)^t.
For t = 16, we have:
A(16) = 5,000(1.08)^16
A(16) = 5,000*3.42594264333
A(16) = 17,129.71
We have the accumulation function A(t) = 5,000(1.08)^t.
For t = 16, we have:
A(16) = 5,000(1.08)^16
A(16) = 5,000*3.42594264333
A(16) = 17,129.71