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A principal of $4800 is invested at 5.5% interest, compounded annually. How much will the investment be worth after 5 years?

User AlvaroAV
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1 Answer

5 votes

Answer:

A = $6273.41

Explanation:


\displaystyle A = P \big{(}1+ (r)/(n) \big{)} ^(nt)

  • A = Amount of the investment in the future
  • P = Principal value (initial amount)
  • r = Interest rate
  • n = Number of times interest is compounded per year
  • t = Time (years)

Substitute all of the known values into this equation.


\displaystyle A = 4800\big{(}1 + (.055)/(1)\big{)} ^{(1)(5)

Solving for A in this equation gives us an answer of:


A = 6273.41

Therefore, the investment will be worth $6273.41 after 5 years.

User Pixelastic
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