Question

If 17,900 dollars is invested at an interest rate of 6 percent per year, find the value of the investment at the end of 5 years for the following compounding methods.

Answer 1

The value of the investment at the end of 5 years is approximately $22,000.73.

Step-by-step explanation:

To find the value of the investment at the end of 5 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the initial principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, the principal is $17,900, the interest rate is 6% (or 0.06), and the compounding is done annually (n = 1). Plugging in these values, we have:

A = 17900(1 + 0.06/1)^(1 * 5)

A = 17900(1.06)^5

Simplifying further, we have:

A ≈ $22,000.73

Therefore, the value of the investment at the end of 5 years is approximately $22,000.73.