Answered

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An initial investment of $2,000 earns 7% interest compounded continuously. What will the investment be worth in 17 years? (Round your answer to the nearest cent.)

Sagot :

Lanuel

Answer:

Future value, A = $6,317.6

Step-by-step explanation:

Given the following data;

Principal = $2,000

Interest rate = 7%

Time = 17 years

To find the future value, we would use the compound interest formula;

[tex] A = P(1 + \frac{r}{100})^{t}[/tex]

Where;

A is the future value.

P is the principal or starting amount.

r is annual interest rate.

t is the number of years for the compound interest.

Substituting into the equation, we have;

[tex] A = 2000*(1 + \frac{7}{100})^{17}[/tex]

[tex] A = 2000*(1 + 0.07)^{17}[/tex]

[tex] A = 2000*(1.07)^{17}[/tex]

[tex] A = 2000 * 3.1588 [/tex]

Future value, A = $6,317.6

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