Question

A principal of $2900is invested at 3.25% interest, compounded annually. How much will the investment be worth after 9years? Use the calculator provided and round your answer to the nearest dollar.

Answer 1

Given:

Principal = $2900

Rate of interest = 3.25% compounded annually.

Time = 9 years.

To find:

The amount of investment after 9 years.

Solution:

The formula for amount is:

`A=P\left(1+(r)/(n)\right){nt}`

Where, P is principal, r is rate of interest, n number of times interest compounded in an year and t is the number of years.

Substitute P=2900, r=0.0325, n=1 and t=9.

`A=2900\left(1+(0.0325)/(1)\right)^(1* 9)`

`A=2900\left(1+0.0325\right)^(9)`

`A=2900\left(1.0325\right)^(9)`

Using calculator, we get

`A=3867.306`

`A\approx 3867`

Therefore, the worth of the investment after 9 years will be $3867.