Question

$1800 is invested at 4% compounded annually. Find the future value of the investment in 5 years. Find the interest that the investment will earn after the term.

Answer 1

5 Years is 1800x1.04^5 = 2189.98
Interest is 389.98

Answer 2

Answer: the interest that the investment will earn after the term is $38.97

Step-by-step explanation:

1,800 x .04 x 1/2 = 36 (interest earned after 1 year)

1,800 + 36  = 1,836

1,836 x .04 x 1/2 = 36.72 (interest earned after 2 years)

1,836 + 36.72 = 1,872.72

1,872.72 x .04 x 1/2 = 37.4544 -> 37.45 (interest earned after 3 years)

1,872.72 + 37.45 = 1,910.17

1,910.17 x .04 x 1/2 = 38.2034 -> 38.20 (interest earned after 4 years)

1,910.17 + 38.20 = 1,948.37

1,948.37 x .04 x 1/2 = 38.9674 -> 38.97 (interest earned after 5 years)