Joseph Ray just received an inheritance of $50,000 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 6% per year with quarterly compounding for 30 years, how much will he have accumulated? (Round off to the nearest dollar.)
A) $298,466
B) $271,550
C) $284,622
D) $269,113

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years. Plugging in the values: A = $50,000(1 + 0.06/4)^(4*30) = $298,465.84, which rounds off to $298,466.

Joseph Ray Just Received an Inheritance of $50,000 from His