Andrew invested $11 500 for 2 years 6 months at 7.25% per annum.
Find the value of the investment at the end of the term. (Answer to the nearest cent.)
Final balance = $____
To find the value of the investment at the end of the term, we can use the formula for compound interest:
Final Balance = Principal * (1 + Interest Rate)^Time
First, let's calculate the time in years for the investment. We know that the investment is for 2 years and 6 months. If we convert the 6 months into a fraction of a year, we get 6/12 or 0.5 years.
So, the time in years is 2 + 0.5 = 2.5 years.
Now, we can plug in the values into the formula:
Principal = $11,500
Interest Rate = 7.25% = 0.0725 (converted to decimal)
Time = 2.5 years
Final Balance = 11,500 * (1 + 0.0725)^2.5
Using a calculator, let's calculate the value:
Final Balance = 11,500 * (1.0725)^2.5
Final Balance ≈ $13,826.62 (rounded to the nearest cent)
Therefore, the value of the investment at the end of the term is approximately $13,826.62.