Question

Find the value of an investment of $15,000 for 13 years at an annual interest rate of 3.15%

Answer 1

Step-by-step explanation:

We are given an investment of $15,000 invested for 13 years at an annual rate of 3.15%.

To calculate the Simple Interest on this investment, the formula given is;

`I=PRT`

Where the variables are;

`\begin{gathered} P=15000 \\ R=3.15\% \\ T=13 \end{gathered}`

We now have;

`I=15000*0.0315*13`
`I=6142.5`

The value at the end of the investment period is now derived as;

`A=P+I`
`A=15000+6142.5`
`A=21,142.5`

To calculate value of this investment using the compound interest formula, we shall apply the formula which is;

`A=P(1+r)^t`

Given the same variables as earlier, we simply substitute and solve as shown below;

`A=15000(1+0.0315)^(13)`
`A=15000(1.0315)^(13)`
`A=15000(1.49658028574)`
`A=22448.7042861`

We can round this to 2 decimal places and we'll have;

`A=22,448.70`

ANSWER:

Amount of the investment after 13 years will be $22,448.70