Answer
The value of the account after 18 years will be $\$15,473$
Work Step by Step
This is the formula we use when we make calculations with compound interest:
$A = P~(1+\frac{r}{n})^{nt}$
$A$ is the final amount in the account
$P$ is the principal (the amount of money invested)
$r$ is the interest rate
$n$ is the number of times per year the interest is compounded
$t$ is the number of years
We can find the total amount in the account after 10 years when we invest at a rate of 5.25% compounded semiannually.
$A = P~(1+\frac{r}{n})^{nt}$
$A = (\$6000)~(1+\frac{0.0525}{2})^{(2)(10)}$
$A = \$10,074.29$
After 10 years, there will be $\$10,074.29$ in the account.
We can find the total amount in the account after 8 more years when we invest at a rate of 7.25% compounded quarterly.
$A = P~(1+\frac{r}{n})^{nt}$
$A = (\$10,074.29)~(1+\frac{0.054}{4})^{(4)(8)}$
$A = \$15,473$
After 8 more years, there will be $\$15,473$ in the account.
The value of the account after 18 years will be $\$15,473$
