Question

To what amount will the following investments accumulate?

a. $5,200 invested for 8 years at 10 percent compounded annually.
b. $7,800 invested for 6 years at 7 percent compounded annually.
c. $750 invested for 13 years at 11 percent compounded annually.
d. $20,000 invested for 5 years at 6 percent compounded annually.

Answer 1

The accumulated amounts for the given investments are: a. $10,886; b. $11,845; c. $2,335.92; d. $26,754.91.

Step-by-step explanation:

To calculate the future value of an investment with compound interest, we use the formula A = P(1+r/n)^(nt), where A is the future value, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

1. For investment a, the principal amount is $5,200, the annual interest rate is 10%, and interest is compounded annually. Plugging these values into the formula, we get A = 5200(1+0.10/1)^(1*8), which gives an accumulated amount of $10,886.
2. For investment b, the principal amount is $7,800, the annual interest rate is 7%, and interest is compounded annually. Using the formula, we get A = 7800(1+0.07/1)^(1*6), which yields an accumulated amount of $11,845.
3. For investment c, the principal amount is $750, the annual interest rate is 11%, and interest is compounded annually. Plugging in these values, we get A = 750(1+0.11/1)^(1*13), which results in an accumulated amount of $2,335.92.
4. For investment d, the principal amount is $20,000, the annual interest rate is 6%, and interest is compounded annually. Using the formula, we find A = 20000(1+0.06/1)^(1*5), which gives an accumulated amount of $26,754.91.