Use the formula for computing future value using compound interest to determine the value of an account at the end of 7 years if
a principal amount of $2,500 is deposited in an account at an annual interest rate of 4% and the interest is compounded daily. (Assume there are 365 days in a year.) Round to the nearest cent as needed.) The amount after 7 years will be ?
A = the future value of the investment/loan, including interest P = the principal investment amount (the initial deposit or loan amount) r = the annual interest rate (decimal) n = the number of times that interest is compounded per year t = the number of years the money is invested or borrowed for
1) I use an interest program on my calculator. You could also use the equation listed in the math textbook. Principle=2500 Rate=0.025 Years=3 No.compounds/yr=4 Answer is $2,694.08
