Question

A principal of $4500 is invested at 5.75% Interest, compounded annually. How much will the investment be worth after 5 years?

Answer 1

Answer:

$5,951.33

Step-by-step explanation:

We can use the compound interest formula to solve this problem:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 5.75% into a decimal:

5.75% -> $\frac{5.75}{100}$ -> 0.0575

Now, plug in the values:

$A=4,500(1+\frac{0.0575}{1})^{1(5)}$

$A=5,951.33$

After 5 years, the investment will be worth $5,951.33