Question

Consider an investment of $6000 that earns 4.5% interest

Answer 1

Answer:

$11,611.69

Step-by-step explanation:

Compound Interest Formula

$\large \sf A=P\left(1+\frac{r}{n}\right)^{nt}$

where:

• A = final amount
• P = principal amount
• r = interest rate (in decimal form)
• n = number of times interest applied per time period
• t = number of time periods elapsed

Given:

• P = $6,000
• r = 4.5% = 0.045
• n = 1 (annually)
• t = 15 years

Substitute the given values into the formula and solve for A:

$\implies \sf A=6000\left(1+\frac{0.045}{1}\right)^{(1 \times 15)}$

$\implies \sf A=6000(1.045)^{15}$

$\implies \sf A=11611.69466...$

Therefore, the value of the investment after 15 years will be $11,611.69 to the nearest cent.