Question

Alex pays $4000 for 7 years, and the investment grows to $5263.73. What is the compound interest (x) after 7 years?

Options:

a) $1263.73

b) $2263.73

c) $3263.73

d) $4263.73

Answer 1

The compound interest earned after 7 years on a $4000 investment that grew to $5263.73 is $1263.73, which is option (a).

Step-by-step explanation:

The question is asking for the compound interest Alex earned after 7 years on his $4000 investment, which grew to $5263.73. To calculate the compound interest, you subtract the initial investment from the final amount.
The formula to calculate compound interest is:
Compound Interest = Final Amount - Initial Investment

So in this case, it would be:
Compound Interest = $5263.73 - $4000
Compound Interest = $1263.73

Therefore, the correct answer to the question is:
a) $1263.73.