Question

$28,600 at 7.9% compounded annually for 2 years,find the future value

Answer 1

$33,297.3

Step-by-step explanation

to know the future value of that amount we need to use the formula

`A=\text{ P(1+}(r)/(n))^(nt)`

where

P is the principal ( initial amount)

r is the rate ( in decimals)

n is the number of times the interest is compounded per unit t

t is the time

so

Let

`\begin{gathered} P=28600 \\ r=7.9\text{ \%= }(7.9)/(100)=0.079 \\ n=\text{ 1 ( compounded annually)} \\ t=\text{ 2 } \end{gathered}`

now, replace and calculate

`\begin{gathered} A=\text{ P(1+}(r)/(n))^(nt) \\ A=28600(1+(0.079)/(1))^(1\cdot2) \\ A=28600(1.079)^2 \\ A=28600\cdot(1.164241) \\ A=33297.2926 \end{gathered}`

therefore, the answer is

$33,297.3

I hope this helps you