Use the formula for computing future value using compound interest to determine the value of an account at the end of 7 years if a principal amount of $2,500 is deposited in an account at an annual interest rate of 4% and the interest is compounded daily. (Assume there are 365 days in a year.) Round to the nearest cent as needed.)

The amount after 7 years will be?

Question

Eliezer Chapman

Mathematics

8 June, 13:41

Use the formula for computing future value using compound interest to determine the value of an account at the end of 7 years if a principal amount of $2,500 is deposited in an account at an annual interest rate of 4% and the interest is compounded daily. (Assume there are 365 days in a year.) Round to the nearest cent as needed.)

The amount after 7 years will be?

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Answers (1)

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Miranda Frost · Answer 1

In 7 years, you will have $3,307.77

Formula:

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

Where:

A = the future value of the investment/loan, including interest

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per year

t = the number of years the money is invested or borrowed for