Question

How much would $200 invested at 7% interest compounded annually be

Answer 1

Answer:

70dollars

Step-by-step explanation:

simple interest

Answer 2

Answer:

It will be worth $280.51.

Step-by-step explanation:

The compound interest formula is given by:

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

Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per years and t is the time the money is invested or borrowed for, in years.

In this problem:

We want to find A, when $P = 200, r = 0.07, n = 1, t = 5$

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

$A = 200*(1 + \frac{0.7}{1})^{1*5}$

$A = 280.51$

It will be worth $280.51.