Bradley snapp has deposited $7,000 in a guaranteed investment account with a promised rate of 6% compounded annually. he plans to leave it there for 4 full years when he will make a down payment on a car after graduation. how much of a down payment will he be able to make? select one:

a. $1,960.00

b. $2,175.57

c. $8,960.00

d. $8,837.34

e. $9,175.57

Question

Alina Richards

Business

2 December, 08:28

Bradley snapp has deposited $7,000 in a guaranteed investment account with a promised rate of 6% compounded annually. he plans to leave it there for 4 full years when he will make a down payment on a car after graduation. how much of a down payment will he be able to make? select one:

a. $1,960.00

b. $2,175.57

c. $8,960.00

d. $8,837.34

e. $9,175.57

+1

Answers (1)

Know the Answer?

Niko Murphy · Answer 1

P = $7,000, principal

r = 6% = 0.06, rate

n = 1, compounding interval

t = 4 years

Calculate the value after 4 years.

A = 7000 * (1 + 0.06) ⁴

= $8,837.34

Answer: d. $8,837.34