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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Business

Gianni Mcintyre

4 April, 08:00

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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Collin · Answer 1

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