Question

$3000 invested at an APR of 5% for 7 years. If interest is compounded annually , what is the amount of money after 7 years?

Answer 1

`Sum=\$3000\cdot(1+5\%)^7=\$3000\cdot (1.05)^7\approx \$4221.30`

Answer 2

With annual compounding, the value of the investment after 7 years is

Value = $3,000 [ 1 + 0.05 ] to the 7th power .

Value = $3,000 [ 1.4071 ] = $4,221.30