Question

The initial value of an investment is $15,000. If the investment earns an annual interest rate of 1.1%, what is its value in 8 years?

Answer 1

To find the future value of a $15,000 investment at a 1.1% annual interest rate over 8 years, use the compound interest formula to calculate the total amount the investment will grow to after the specified time.

Step-by-step explanation:

To calculate the future value of an investment with a given initial value, annual interest rate, and a set number of years, we can use the formula for compound interest. In this case, the student has a $15,000 investment that earns an annual interest rate of 1.1% over 8 years. The formula for calculating the future value is Total future amount = Initial investment (1 + Interest rate)^number of years. For this investment:

Total future amount = $15,000 (1 + 0.011)^8

After calculating the power of (1 + 0.011) to the 8th power and multiplying the result by $15,000, we get the future value of the investment.

Answer 2

To find the future value of a $15,000 investment over 8 years at an annual interest rate of 1.1%, use the compound interest formula. The total future amount is calculated by multiplying the initial investment by (1 + interest rate) raised to the power of the number of years.

Step-by-step explanation:

The value of an investment after a certain number of years can be calculated using the formula for compound interest. The formula to find the total future amount of an investment is:

Total future amount = Principal amount (1 + Interest rate)number of years

In this case, the initial investment is $15,000, the interest rate is 1.1%, and the time frame is 8 years. Applying the compound interest formula:

Total future amount = $15,000 (1 + 0.011)8

By calculating the right side of the equation, you will find the future value of the investment after 8 years.