Question

Find the balance in the account. $2,400 principal earning 2%, compounded annually, after 7 years $307,200.00 $17,136.00 $2,736.00 $2,756.85

Answer 1

`2,756.85`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=7\ years\\ P=\$2,400\\ r=2\%=2/100=0.02\\n=1`

substitute in the formula above

`A=2,400(1+(0.02)/(1))^(1*7)`

`A=2,400(1.02)^(7)`

`A=2,756.85`