Question

Evan invested $800 in an account that pays 3.25% interest compounded annually.

Answer 1

Answer:

Evans would have $852.8

Step-by-step explanation:

Given

$PV = \ 800$

$r = 3.25\%$

$t = 2$

$n = 1$ --- annually'

Required

The future value

This is calculated using:

$FV = PV*(1 + \frac{r}{n})^{nt$

So, we have:

$FV = 800 * (1 + 3.25\%/1)^{2*1}$

$FV = 800 * (1 + 3.25\%)^{2}$

$FV = 800 * (1 + 0.0325)^{2}$

$FV = 800 * (1 .0325)^2$

$FV = 852.845$

$FV = 852.8$

FV =