math
Please explain how $12,905.80 is the answer to the question: To save for retirement, a couple deposits $4000 in their account that pays 5.9% interest compounded quarterly. What will be the value of thier investment in 20 years?
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The formula for calculating the future value of a compounding investment is FV = PV x (1 + r/n) ^ (nt) In this problem, PV = $4,000, r = 5.9%, n = 4 (number of times per year interest is compounded), t = 20 (number of years). Plugging in the values to the formula above: FV = $4,000 x (1 + 0.059/4) ^ (4 x 20) FV = $4,000 x (1.0148) ^ 80 FV = $4,000 x 4.5068 FV = $18,027.20 Subtracting the initial investment of $4,000, the couple's final account value in 20 years is $12,905.80.
