Question

John wants to invest P dollars at a 4% interest rate. After 5 years the investment will be worth 2000 dollars. How much will it be worth in 11 years?

Answer 1

Answer:

About $2530.63

Step-by-step explanation:

The formula for this kind of calculation is $A=P(1+\frac{r}{n})^{nt}$, where P is the initial investment, r is the interest rate, n is the number of times you compound your investment per year, and t is the number of years. Assuming that you compound yearly, plugging in the numbers that you have given, you are left with:

$2000=P(1+\frac{0.04}{1})^{t}$

$2000=P\cdot (1.04)^5\\P\approx 1643.85\\A=1643.85 \cdot (1.04)^{11}\approx 2530.63$

Hope this helps!