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The expression gives the value of your investment is
The value of investment after 5 years is $ 1683.06
<em><u>Solution:</u></em>
Given that You invest $1200 and it grows at a rate of 7% for 5 years
To find: Expression that gives the value of your investment
From given information,
Principal = $ 1200
rate of interest = 7 %
number of years = 5 years
The formula for compound interest, including principal sum, is:
Where,
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per unit t
t = the time the money is invested or borrowed for
Assuming interest is compounded annually, n = 1
Substituting the values we get,
Thus the value of investment after 5 years is $ 1683.06