Question

A principal of $2500 is invested at 8.25% interest, compounded annually. How much will the investment be worth after 11 years? Use the calculator provided and round your answer to the nearest dollar.

Answer 1

$5979

Explanation:

The compound interest expression is given as

`A= P(1+r)^t`

Given data

Principal P= $2500

Rate r= 8.25%

Time t = 11 years

Substituting into the expression we can find the final amount A

`A= 2500(1+0.0825)^1^1\\A= 2500(1.0825)^1^1\\\\A= 2500*2.3917\\A= 5979.25`

To the nearest dollar the final amount is $5979