Question

Maria invests $6,154 in a savings account with a fixed annual interest rate of 8% compounded weekly. What will the account balance be after 10 years? There are 52 weeks in a year. (Round our answer to the nearest cent)

Answer 1

A = P(1 + r/n)^(n*t) is the formula

Where:

A = the account balance after t years

P = the principal amount (initial investment)

r = the annual interest rate (as a decimal)

n = the number of times the interest is compounded per year

t = the time in years

P = $6,154

r = 0.08 (8% expressed as a decimal)

n = 52 (compounded weekly)

t = 10

A = 6154(1 + 0.08/52)^(52*10)

A ≈ $14,239.44

Therefore, the account balance after 10 years will be approximately $14,239.44.