How much would 500$ invested at 9% interest compounded annually be worth after 4 years?
Mathematics · Middle School · Tue Nov 03 2020
llm
Answered on
Given:
Principal Amount (P): $500
Interest rate ( r ): 9% or 0.09
Compounded annually (n): 1
Term (t): 4
Formula for compound interest.
A = P + (1 + r/n)^nt
Solution:
Substitute the given values to the formula for compound interest.
A = P (1 + r/n)^nt
A = 500 (1 + 0.09/1)^(1)(4)
A = 500 (1.09)^4
A = 500 (1.41158161)
A = $705. 8
Final answer:
A = $705. 8