Question

A principal of $3100 is invested at 3.75% interest, compounded annually. How much will the investment be worth after 9 years? Use the calculator provided and round your answer to the nearest dollar

Answer 1

he Solution:

iven:

`\begin{gathered} P=Principal=\text{ \$}3100 \\ \\ r=rate=3.75\text{\%} \\ \\ t=time=9years \end{gathered}`

We are required to find the amount the investment will be worth after 9 years.

he Compound interest formula:

`A=P(1+(r)/(100))^n`

In this case:

`\begin{gathered} A=amount=? \\ P=\text{ \$3100} \\ r=3.75\text{ \%} \\ n=9\text{ years} \end{gathered}`

Substitute:

`A=3100(1+(3.75)/(100))^9=3100(1.0375)^9=4317.7217\approx\text{ \$}4318`

Therefore, the correct answer is $4318