Answer:
an initial investment of $500 at 4% interest compounded monthly would be worth approximately $690.57 after 7 years.
Explanation:
To calculate the future value of an investment with compound interest, we can use the following formula:
FV = P * (1 + r/n)^(n*t)
Where:
FV is the future value of the investment
P is the principal amount (the amount you started with)
r is the annual interest rate (as a decimal)
n is the number of times the interest is compounded per year
t is the number of years
In this case, we have:
P = 500 (the initial investment)
r = 0.04 (4% as a decimal)
n = 12 (compounded monthly)
t = 7 (the number of years)
Plugging in these values, we get:
FV = 500 * (1 + 0.04/12)^(12*7) ≈ 690.57
So, an initial investment of $500 at 4% interest compounded monthly would be worth approximately $690.57 after 7 years.