Question

A principal of $3500 is invested at 7.5% interest, compounded annually. How much will the investment be worth after 13 years? Use the calculator provided and round your answer to the nearest dollar.

Answer 1

The equation is for when you compound annually is
$A=P(1+r)^t$

A=future amount
P=initial amount or principal
r=interest rate in decimal form
t=time in years



so
A=A
P=3500
r=7.5%=0.075
t=13

$A=3500(1+0.075)^{13}$
$A=3500(1.075)^{13}$
use your calculator
A=8961.4457
round to nearest dollar
A=$8961

that's how much the investment will be worth after 13 years