4
QuizMultiple Choice

Compound Interest

Question 4 • Academy- Financial Algebra A 27

How much money would need to be deposited into an account earning 5.25% interest compounded annually in order for the accumulated value at the end of 25 years to be $75,000?

Answer
A
$20,243.85
B
$20,869.34
C
$57,142.86
D
$67,245.61

Explanation

For annual compounding, the accumulated value is A = P(1 + r)^t, where P is the deposit. Solving for P gives P = 75,000 ÷ (1.0525)^25 ≈ $20,869.34. Therefore, the required deposit is $20,869.34, choice B.

AI-written and checked against the verified answer.

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