Final answer:
The value of $500 invested at 7% interest compounded annually after 4 years is approximately $610.09.
Step-by-step explanation:
To calculate the value of $500 invested at 7% interest compounded annually after 4 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A = the future value of the investment
- P = the principal amount invested
- r = the annual interest rate (as a decimal)
- n = the number of times the interest is compounded per year
- t = the number of years
Plugging in the values, we get:
A = 500(1 + 0.07/1)^(1*4)
A = 500(1.07)^4
A ≈ $610.09