Cecile is 23 years old and wants to retire when she is 55.She opens up a retirement account and makes a $400 deposit each month.If the account pays 2.75% interest compounded monthly,she will have about $245,842.67 in her account when she is 55.

Question

Quizplus · Accepted Answer

We can use the formula A=P*(1+r/n)^(nt) where A is the final amount, P is the principal (initial deposit), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years. Plugging in the given values, we get:

A = 400*(1+(0.0275/12))^(12*(55-23))
A = $245,842.67

Therefore, the statement is true.

Cecile Is 23 Years Old and Wants to Retire When