Question

If a person invests $260 at 4% annual interest, find the approximate value of the investment at the end of 5 years

Answer 1

The formula is
A=p (1+r)^t
A future value?
P present value 260
R interest rate 0.04
T time 5years
A=260×(1+0.04)^(5)
A=316.33

Answer 2

$312.

Explanation:

We have been given that a person invests $260 at 4% annual interest. We are asked to find the approximate value of the investment at the end of 5 years.

We will use simple interest formula to solve our given problem.

`A=P(1+rt)`, where,

A = Amount after t years,

P = principal amount,

r = Annual interest rate in decimal form,

t = Time in years,

`4\%=(4)/(100)=0.04`

`A=\$260(1+0.04*5)`

`A=\$260(1+0.20)`

`A=\$260(1.20)`

`A=\$312`

Therefore, the approximate value of the investment at the end of 5 years will be $312.