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You deposit $1295 dollars in a mutual fund that provides an average return of 8.4% interest compounded annually.

Find your account balance after 7 years.

User Isaac Paul
by
8.1k points

1 Answer

4 votes

Answer: $2,277.5

Explanation:

Hi, to answer this question we have to apply the compounded interest formula:

A = p (1+ r )^t

A = total amount (principal plus returns)

P = principal invest

r =interest rate (decimal form)

t = time (in this case years)

Replacing with the values given:

A = 1295 (1 + 8.4/100)^7

A = 1295 ( 1+ 0.084)^7

A = 1295 ( 1.084)^7

A = 2,277.5

User Patrizio Bertoni
by
8.8k points
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