Rosy deposits $25,000 into an investment account with an annual rate of 3.5% compounded annually. The amount in her account can be determined by the formula A = P(1 + r) t, where P is the amount deposited, r is the annual interest rate, and t is the time taken. If she makes no other deposits or withdrawals, how much money will be in her account at the end of 15 years?
First, we have our basic equation A = P(1 + r)^t A = Amount after t time periods P = Principle (Starting amount) = 25000 t = time periods (in this case, years since its compounded annually) = 15 r = annual interest rate = .035 Plug and chug! A = P(1 + r)^t A = 25000 (1 + .035)^15 A = 25000 (1.035)^15 A = $41,883.72