Question

Calculate the total value of investment after the time given: show your work. $1,240 at 8% compounded annually for 2 years

Answer 1

Given:

• Principal, P = $1,240

,

• Interest rate, r = 8% = 0.08

,

• Time, t = 2 years

,

• Number of times compounded = annually = 1 time a year

Let's calculate the total value of the investment.

To calculate, apply the compound interest formula:

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

Where:

A is the final amount

P = 1240

r = 0.08

n = 1

t = 2

Input values into the formula and solve for A:

`\begin{gathered} A=1240(1+(0.08)/(1))^(2*1) \\ \\ A=1240(1.08)^2 \\ \\ A=1240(1.1664) \end{gathered}`

Solving further:

`A=1446.34`

Therefore, the total value of the investment after the given time is $1,446.34

ANSWER:

$1,446.34