Question

a principal of $1800 is invested at 3.25% interest, compounded annually. how much will the investment be worth after 12 years? use the calculator provided and round your answer to the nearest dollar.

Answer 1

To calculate the final value of the investment, we can use the formula:

A = P(1 + r/n)^(n*t)

where:

A is the final value of the investment

P is the principal amount invested, which is $1800 in this case

r is the annual interest rate expressed as a decimal, which is 0.0325 (since 3.25% = 0.0325)

n is the number of times the interest is compounded per year, which is once annually in this case

t is the number of years the money is invested, which is 12 years in this case

Plugging in the values, we get:

A = 1800(1 + 0.0325/1)^(1*12)

= 1800(1.0325)^12

= 2499.74

Rounding this to the nearest dollar, we get that the investment will be worth $2,500 after 12 years.