Question

Jonah has decided to save $15,674 in a bank account today, to save for his retirement. His deposit is expected to earn an 10% p.a. rate of return, compounded quarterly. How much will Jonah have accumulated at the end of 44 years, when he retires?

Answer 1

Jonah will have accumulated approximately $815,214 at the end of 44 years when he retires.

Step-by-step explanation:

To find the amount Jonah will have accumulated at the end of 44 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

• A is the future value of the investment
• P is the principal amount (initial deposit)
• r is the annual interest rate (in decimal form)
• n is the number of times the interest is compounded per year
• t is the number of years

In this case, Jonah's principal amount is $15,674, the annual interest rate is 10% (or 0.10), the number of times the interest is compounded per year is 4 (quarterly), and the number of years is 44.

Plugging these values into the formula, we get:

A = 15674(1 + 0.10/4)^(4*44)

Simplifying, we find that Jonah will have accumulated approximately $815,214 at the end of 44 years when he retires.