$3000 invested at an APR of 5% for 7 years. If interest is compounded annually , what is the amount of money after 7 years?
This is the last time
3000 * 1.05^7
To calculate the amount of money after 7 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future amount after t years
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of years
In this case, the principal amount (P) is $3000, the annual interest rate (r) is 5% (or 0.05 as a decimal), the interest is compounded annually (n = 1), and the time period (t) is 7 years.
Plugging in these values into the formula:
A = 3000(1 + 0.05/1)^(1*7)
A = 3000(1 + 0.05)^7
A = 3000(1.05)^7
A = 3000(1.405071)
A ≈ $4215.21
So, the amount of money after 7 years is approximately $4215.21.