Question

A principal of $2600 is invested at 7.5% interest, compounded annually. How much will the investment be worth after 8 years?

Answer 1

To add 7.5% to a number you simply multiply the number by 1.075. To compound that amount year after year, you raise 1.075 to an exponent that corresponds to the number of years. 2600*(1.075^8)=4637.04234646