Question

A principal of $2600 is invested at 7% interest, compounded annually. How much will the investment be worth after 13 years?

Answer 1

Answer:

The total amount accrued, principal plus interest,  from compound interest on an original principal of  $ 2600 at a rate of 7% per year  compounded 1 time per year  over 13 years is $ 6266.

Step-by-step explanation:

Given

Principle P =  $2600

Interest rate r = 7% = 0.07

Time period t = 13 years

Compounded annually means: n = 1

To determine

Accrued Amount = ?

Using the formula

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

substituting P = 2600, r = 0.07, t = 13, n = 1

$A\:=\:2600\left(1\:+\:\frac{0.07}{1}\right)^{1\left(13\right)}$

$A=2600\left(1+0.07\right)^{1\cdot \:13}$

$A = 6266$ $

Therefore, the total amount accrued, principal plus interest,  from compound interest on an original principal of  $ 2600 at a rate of 7% per year  compounded 1 time per year  over 13 years is $ 6266.