Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Our platform offers a seamless experience for finding reliable answers from a network of experienced professionals. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

How much would $500 invested at 7% interest compounded annually be worth after 4 years? Round your answer to the nearest cent

Sagot :

AL2006
If 7% interest is compounded annually, then the value of the $500
after 'Y' years in the future is
                                                         $500 (1.07)^to the 'y' power .

For this exercise, it's    $500 (1.07)⁴ =  $ 655.40 .     

Answer: $655.40

Step-by-step explanation:

Given : Principal amount = $500

The rate of interest  compounded annually  =7%=0.07

Time = 4 years

We know that compound amount after n years is given by :

[tex]A=P(1+r)^n[/tex]

Thus for the given situation , the compounded  amount after 4 years will be :-

[tex]\\\Rightarrow\ A=500(1+0.07)^4\\\Rightarrow\ A=500(1.07)^4\\\Rightarrow\ A=\$655.398005\approx\$655.40........\text{to the nearest cent.}[/tex]

Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.