Question

$14,900 is invested at 2.7% interest compounded quarterly, how much will the investment be worth in 17 years? a. $23,566.96 b. $23,506.82 c. $23,436.02 d. $23,542.78

Answer 1

To calculate the future value of an investment with compound interest, 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. In this scenario, we have the values needed to calculate the future value of the investment, so we can plug them into the formula and simplify the equation.

Step-by-step explanation:

To calculate the future value of an investment with compound interest, you can use the formula:

A = P(1 + r/n)^(nt)

Where:

• A = the future value of the investment
• P = the principal amount (initial investment)
• r = annual interest rate (as a decimal)
• n = number of times interest is compounded per year
• t = number of years

In this case, we have:

P = $14,900

r = 0.027 (2.7% as a decimal)

n = 4 (compounded quarterly)

t = 17 years

Plugging these values into the formula, we get:

A = 14900(1 + 0.027/4)^(4*17)

Simplifying this equation will give us the future value of the investment. Let me calculate it for you.

Answer 2

Using the compound interest formula, the investment of $14,900 at 2.7% interest compounded quarterly for 17 years will be worth $23,506.82.

Step-by-step explanation:

To calculate the future value of an investment with compound interest, you can use the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial sum of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.

In this case, we have a principal amount of $14,900, an annual interest rate of 2.7% (or 0.027 in decimal form), compounded quarterly (so n = 4), over 17 years. We need to find A using the formula.

Plugging in the values, we get A = 14900(1 + 0.027/4)^(4*17). Calculating this gives us A = $23,506.82.

Therefore, after 17 years, the investment will be worth $23,506.82.