Question

P 3-30 (similar to Question Help Your grandfather put some money into an account for you on the day you were born. You are now 18 years old and are allowed to withdraw the money. The account currently has $8,512 in it and pays an interest rate of 10% a. How much money would be in the account if you left the money there until your 25th birthday? b. What if you left the money until your 65th birthday? c. How much money did your grandfather originally put into the account? a. How much money would be in the account if you left the money there until your 25th birthday? The amount that would be in the account if you left the money there until your 25th birthday would be (Round to the nearest dollar.)

Answer 1

1. a) Number of years = 7
Rate = 10%
FV = 8512*(1+10%)⁷ = 16587.48

b) Money left after 65th year = 8512*(1+10%)⁴⁷ = 750,736.99

c) The amount your grandfather put into money = 8512/(1+10%)¹⁸ = 1530.96

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