Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays 6 percent annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much will be in the account when you retire?
A)$3,752
B)$12,985
C)$24,871
D)$46,794

Question

Quizplus · Accepted Answer

Use the formula FV = PV (1 + i)ⁿ, where i is the interest rate and n the number of years. At the interest rate of 6 percent, your deposit after 44 years= $1,000 × (1.06)⁴⁴ = $12,985.

Suppose When You Are 21 Years Old, You Deposit $1,000