An investment of $4000 earns 2% interest compounded annually. What will be the value of the investment in 7 years?

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An investment of $4000 earns 2% interest compounded annually. What will be the value of the investment in 7 years?

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Bình An 5 years 2021-07-20T14:55:43+00:00 1 Answers 17 views 0

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  1. thienhuong
    0
    2021-07-20T14:57:31+00:00
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    $4594

    a=p(1+r)^t
    a=final number
    p=principal balance (initial)**without interest**
    r=interest rate
    t=the amount of time
    p=$4000
    t= 7yrs
    r=2%=0.02
    we need to turn 2% into a decimal, to do that you divide 2 by 100 which is 0.02
    now we rewrite the equation-
    a=4000(1+0.02)^7
    a=4000*1.1486

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