Anna has $38,654 in a savings account that pays 2.3 percent interest.Assume she withdraws $10,000 today and another $10,000 one year from today.If she waits and withdraws the remaining entire balance four years from today,what will be the amount of that withdrawal?

Question

Quizplus · Accepted Answer

To find the future value of Anna's remaining balance, we can use the formula:

FV = PV(1 + r)^n

Where FV is the future value, PV is the present value, r is the interest rate, and n is the number of years.

The present value of Anna's remaining balance is $18,654 ($38,654 - $10,000 - $10,000). The interest rate is 2.3 percent, or 0.023 as a decimal. The number of years until she withdraws the remaining balance is four.

Plugging these values into the formula, we get:

FV = $18,654(1 + 0.023)^4
FV = $20,676.53

Therefore, the amount of Anna's final withdrawal will be $20,676.53, which is choice C.

Anna Has $38,654 in a Savings Account That Pays 2