Question

Jenny invest $1000 at a rate of 12.5% that compounds annually for eight years the future value of the investment can be calculated Hal

Answer 1

`\$2,565.78`

Explanation:

we know that

The compound interest formula is equal to

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

where

A is the Final Investment Value or Future 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=8\ years\\ P=\$1,000\\ r=12.5\%=12.5/100=0.125\\n=1`

substitute in the formula above

`A=1,000(1+(0.125)/(1))^(1*8)`

`A=1,000(1.125)^(8)`

`A=\$2,565.78`