Question

An investment of P=1237.50 is compounded annually with a 6.75% APR . Find the value of the investment after 5 and a half years.

Answer 1

Answer:

Under compound interest, not only does the principal generate interest, so does the previous accumulated interest. The future value F of P dollars compounded annually for t years with an annual percentage rate (APR) r expressed as a decimal is .

Answer 2

Answer:

• 1772.43

Step-by-step explanation:

Given:

• Principal P = 1237.50
• Interest rate r = 6.75% or 0.0675
• Number of compounds n = 1
• Time t = 5.5 years

Find the total:

• $A = P(1 + r/n)^{nt}$
• $A = 1237.5*(1+0.0675)^{5.5} = 1772.43$