Question

Anna deposited $6,874 today in a guaranteed investment account with a promised rate of 4.7% compounded annually. She plans to leave it there for 9 full years. How much money will she have in her account in 9 years? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR.

Answer 1

Here we will use the following formula:

FV = PV * (1 + r%)ⁿ

where, FV = Future value, PV = Present value = $6874, r = rate of interest = 4.7%, n= time period = 9

now, putting theses values in the above equation, we get,

FV = 6874 * (1 + 4.7%)⁹

FV = 6874 * (1 + 0.047)⁹

FV = 6874 * (1.047)⁹

FV = 6874 * 1.511889

FV = 10393

So, she will have 10393 after 9 years.