Question

John wants to invest P dollars at a 4% interest rate. After 5 years the investment will be worth 2000 dollars. How much will it be worth in 11 years?

Answer 1

About $2530.63

Explanation:

The formula for this kind of calculation is
`A=P(1+(r)/(n))^(nt)`, where P is the initial investment, r is the interest rate, n is the number of times you compound your investment per year, and t is the number of years. Assuming that you compound yearly, plugging in the numbers that you have given, you are left with:

`2000=P(1+(0.04)/(1))^(t)`

`2000=P\cdot (1.04)^5\\P\approx 1643.85\\A=1643.85 \cdot (1.04)^(11)\approx $2530.63`

Hope this helps!