How much would $500 invested at 7% compounded annually be worth after 4 years, $A(t)=P(1+r/n)^(nt)$ ?

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Answer 1 · 2016-12-28T10:29:50

$A(t)=$655.40$ to 2 decimal places

They intend that $n$ be the number incidents of calculating the interest in 1 year. So as it is only calculated once $n=1$

They intend that $r$ be the percentage interest $r=7/100$
Note that $(7/100)/n = (7/100)/1 = 7/100$

They intend that $t$ be the number of years.

They intend that $A(t)$ be the sum of the principle sum (P) and any interest at time $t$

So:

$A(t)=P(1+r/n)^(nt) " "->" "A(t)=$500(1+7/100)^4$

$A(t)=$500xx(107/100)^4$

$A(t)=$655.398005$

$A(t)=$655.40$ to 2 decimal places

How much would $500 invested at 7% compounded annually be worth after 4 years, A(t)=P(1+r/n)^(nt)A(t)=P(1+r/n)^(nt)?