A couple deposits 25,000 into an account earning 3% annual interest for 30 years. Calculate the future value of the investment if the interest is compounded weekly. Round your answer to the nearest cent.

Solution

A co u pl e d e p os i t s 25, 000 in t o an a cco u n t e a r nin g 3% ann u a l in t eres t f or 30 ye a rs . C a l c u l a t e t h e f u t u re v a l u e o f t h e in v es t m e n t i f t h e in t eres t i s co m p o u n d e d w ee k l y . R o u n d yo u r an s w er t o t h e n e a res t ce n t .

Amount : 61474.12

Solution steps

Translate the problem into an equation:

A = 25000 (1 + \frac{0.03}{52})^{52 \cdot 30}

25000 (1 + \frac{0.03}{52})^{52 \cdot 30} = 61474.12221 \dots

Round to the nearest hundredth:

61474.12

Amount : 61474.12