$3000 invested at an APR of 5% for 7 years. If interest is compounded annually , what is the amount of money after 7 years?
See your 7:38pm post for solution.
To find the amount of money after 7 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case, let's plug in the given values:
P = $3000
r = 5% = 0.05 (as a decimal)
n = 1 (compounded annually)
t = 7 years
A = 3000(1 + 0.05/1)^(1*7)
A = 3000(1.05)^7
Now we can calculate the final amount:
A = 3000 * 1.40256
A ≈ $4207.68
Therefore, the amount of money after 7 years, with an initial investment of $3000 at an annual interest rate of 5% compounded annually, would be approximately $4207.68.