Question

If Julie invests $9,250 at a rate of 7%, compounded weekly, find the value of the investment after 5 years.

A. $13,455.78
B. $12,487.50
C. $32,370.50
D. $13,123.29

Answer 1

Option D is correct.

Explanation

Principal = $9250

rate of interest = 7% or 0.07

time = 5 years or 260 weeks

[ Since there are 52 weeks in a year . for 5 years it will be 5x52=260 weeks]

Applying the formula

Amount after t years =
`P(1+(r)/(n) )^(nt)`

where P = principal

r = rate % in decimals

n= number of times in a year

t = times ( in years)

plugging the values in the formula

Amount =
`9250(1+(0.07)/(52) )^((52X(5))`

=
`9250(1+0.001346 )^((260))`

=
`9250(1.001346 )^((260))`

= 9250(1.418733588)

=$13123.29