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1. Cecilia’s grandfather set up a savings account for her with a $25,000 gift when she was born. The account accumulated interest annually at a rate of 6% per year and no other deposits were made to the account. Cecilia is 21 years old today. To date, how much has accumulated in the account?

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Answer:

The accumulated amount in the account  = $84,989.09

Explanation:

The amount that has been accumulated in the account is the future value of 25,000 invested invested at 6% interest compounded annually .

FV = PV × (1+r)^n

Future Value(FV) =  ?, Present Value(PV) - 25,000, rate(r)- 6%, number of years(n)-21

FV = 25,000× (1.06)^21

FV = $84,989.09

The accumulated amount in the account  = $84,989.09

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