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lapo4ka [179]
2 years ago
12

2. Your grandfather placed $5,000 in a trust fund for you. In 12 years what will be the worth of the savings. If the estimated r

ate of return on the trust fund is 8%?
Business
1 answer:
Shkiper50 [21]2 years ago
3 0

With compound interest on a principal of $5,000.00 at a rate of 8% per year compounded 1 time per year over 12 years is $12,590.85.

<h3>Compound interest</h3>

Given Data

  • Principal = $5,000
  • Time = 12 years
  • Rate = 8%

Assuming a compounded interest approach

A = P + I where

P (principal) = $5,000.00

I (interest) = $7,590.85

Calculation Steps:

First, convert R as a percent to r as a decimal

r = R/100

r = 8/100

r = 0.08 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 5,000.00(1 + 0.08/1)(1)(12)

A = 5,000.00(1 + 0.08)(12)

A = $12,590.85

Learn more about compound interest here:

brainly.com/question/24924853

#SPJ1

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