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22 November, 19:18

Problem Page A principal of $2100 is invested at 7.75% interest, compounded annually. How much will the investment be worth after 12 years?

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  1. 22 November, 19:40
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    After 12 years the investment will be worth $5145.

    Step-by-step explanation:

    The formula used for compounded interest is:

    A = P (1+r/n) ^nt

    where,

    A = future value

    P = Principal Amount

    r = interest rate

    n = no of times interest is compounded

    t = time

    In the question given:

    A=?

    P = $2100

    r = 7.75% or 0.0775

    n = 1

    t = 12

    A = 2100 * (1+0.0775/1) ^1*12

    A = 2100 * (1+0.0775) ^12

    A = 2100 * (1.0775) ^12

    A = 2100 * 2.45

    A = 5145

    So, after 12 years the investment will be worth $5145.
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