On May 25,1978 three pals graduated from high school,pooled together $1,000 and put the money into an account promising to pay 8% for the next 30 years.On May 25,2008 they withdrew all the money from the account.To the nearest dollar,how much did they withdraw?
A) $2,400
B) $10,063
C) $32,400
D) None of the above are correct to the nearest dollar.

Question

Quizplus · Accepted Answer

The future value of the investment can be calculated using the formula for compound interest: FV = P(1 + r)^n, where P is the principal amount ($1,000), r is the annual interest rate (0.08), and n is the number of years (30). Plugging in the values, FV = 1000(1 + 0.08)^30 = 1000(10.063). Therefore, they withdrew approximately $10,063.

On May 25,1978 Three Pals Graduated from High School,pooled Together