At age 25, you start work for a company that deposits $10,000 into a retirement account that pays a monthly interest rate of 1.1%, and interest is compounded monthly. If you retire at 65, what is the balance in this account?

Question

Quizplus · Accepted Answer

The correct answer is A because the balance in the account at age 65 is $1,907,895.94. This is calculated using the formula A = P(1 + r/n)^(nt), where A is the future value of the investment, P is the principal investment, r is the annual interest rate, n is the number of times per year that interest is compounded, and t is the number of years. In this case, P = $10,000, r = 1.1%, n = 12, and t = 40. Plugging these values into the formula, we get A = $1,907,895.94.

At Age 25, You Start Work for a Company That