Question

10. When Jean Gray was born in 2006, her parents deposited $2000 into an account that pays an interest rate of

25% compounded daily. If she didn't add or remove money from the account, how much would be in the
account in 2023?
Convert rate:
Calculate Period:
Balance =

Answer 1

$10,368

Explanation:

To calculate the balance in Jean Gray's account in 2023, we can use the compound interest formula:

Balance = Principal Amount × (1 + Interest Rate/100)^(Number of Periods)

Given information:

Principal Amount = $2000

Interest Rate = 25% (or 0.25 as a decimal)

Number of Periods = 2023 - 2006 = 17 years

To convert the interest rate to a decimal, we divide it by 100:

Interest Rate = 0.25

Now, we can plug in these values into the compound interest formula:

Balance = $2000 × (1 + 0.25)^(17)

Simplifying the equation, we have:

Balance = $2000 × (1.25)^(17)

Calculating the value inside the parentheses, we have:

Balance = $2000 × 5.184

Finally, multiplying the principal amount by the calculated value, we get:

Balance = $10,368

Therefore, the balance in Jean Gray's account in 2023 would be $10,368.