Question

When Mai turned 21, she invested $2000 in an Individual Retirement Account (IRA) that has grown at a rate of 10% compounded annually. If the account continues to grow at that rate, what will be its value when Mai turns 25?​

Answer 1

well, Mai is 21 today and when she's 25 is 4 years from now, so

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$2000\\ r=rate\to 10\%\to (10)/(100)\dotfill &0.10\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &4 \end{cases} \\\\\\ A=2000\left(1+(0.10)/(1)\right)^(1\cdot 4)\implies A=2000(1.1)^4\implies A=2928.2`