Question

X If $7500 was compounded annually for 8 years at a rate of .23% how much will it be

worth?
Correct answers
7639.11
7639.12
7,639.11
7,639.12

Answer 1

$7639.12

Explanation:

We use the compound formula for accrued value (A) for a principal P deposited at an annual rate "r" over t years

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

In our case, with the given information, the formula becomes:

`A = P (1+r)^t\\A=7500 \,(1.0023)^8\\A = 7639.11602`

which rounded to the nearest cent gives: $7639.12