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Please Help!!

For the past 5 years, Frank and Peggy have deposited $15,000 in a retirement account with a simple interest rate of 7%. They plan to continue to make annual deposits for the next 20 years. Explain how their money will grow over time. Note: You do not need to extend their entire savings for 25 years in your explanation. Focus on the earning for the first several years and explain how their money will grow.

Respuesta :

MissPhiladelphia

A = P(1 + rt)

Where:

·         A = Total Accrued Amount (principal + interest)

·         P = Principal Amount

·         I = Interest Amount

·         r = Rate of Interest per year in decimal; r = R/100

·         R = Rate of Interest per year as a percent; R = r * 100

·         t = Time Period involved in months or years

A = 15,000(1+ 0.07(5))

A = 20,250 they acquired in total for 5 years

The yearly amount the get is 15,000 xx 0.07 = $ 1050 per year

So in the next 25 years addition of 1050x25 = $26250 they will get

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