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If the present value of my investment is $8,000 and the rate of interest is 12% compounded annually, what will the value be after 7 years?​

User Mirekphd
by
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1 Answer

4 votes

Answer:

$17,685.45

Explanation:

We will use the compound interest formula to solve this:


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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

The first step is to change 12% into a decimal:

12% ->
(12)/(100) -> 0.12

Next, lets plug in the values:


A=8,000(1+(0.12)/(1))^(1(7))


A=17,685.45

After 7 years, you will have $17,685.45

User DrPepperJo
by
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