Question

how much would 200 invested at 6% interest compounded annually be worth after 6 years? round your answer to the nearest cent

Answer 1

To calculate the value of an investment with compound interest, use the formula A = P(1 + r/n)^(nt). For an investment of $200 at 6% interest compounded annually over 6 years, the value would be approximately $283.25.

Step-by-step explanation:

To calculate the value of an investment with compound interest, we can use the formula:

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

where:

• A is the final amount
• P is the principal amount (initial investment)
• r is the annual interest rate (decimal form)
• n is the number of times interest is compounded per year
• t is the number of years

In this case, we have:

P = $200

r = 6% (0.06 as a decimal)

n = 1 (compounded annually)

t = 6 years

Substituting these values into the formula, we get:

A = $200(1 + 0.06/1)^(1*6)

Simplifying this expression, we find that the investment would be worth approximately $283.25 after 6 years, when rounded to the nearest cent.

Answer 2

The formula we'll use for this is the simple interest formula, or:

Where:

P is the principal amount, $200.00.
r is the interest rate, 6% per year, or in decimal form, 6/100=0.06.
t is the time involved, 6....year(s) time periods.
So, t is 6....year time periods.
To find the simple interest, we multiply 200 × 0.06 × 6 to get that: The interest is: $72.00Usually now, the interest is added onto the principal to figure some new amount after 6 year(s),
or 200.00 + 72.00 = 272.00. For example: If you borrowed the $200.00, you would now owe $272.00 If you loaned someone $200.00, you would now be due $272.00 If owned something, like a $200.00 bond, it would be worth $272.00 now.