Use Compound Interest Formulas
Use the compound interest formulas A $$A = P \left( 1 + \frac { r } { n } \right) \text { and } A = P e ^ { r t } \text { to solve }$$
-Find the accumulated value of an investment of $1230 at 6% compounded annually for 5 years.
A)$1646.02
B)$1552.85
C)$1525.20
D)$1599.00

Question

Quizplus · Accepted Answer

The formula for compound interest when compounded annually is $A = P \left(1 + \frac{r}{n}\right)^{nt}$, where $P$ is the principal amount ($1230), $r$ is the annual interest rate (6% or 0.06), $n$ is the number of times the interest is compounded per year (1 for annually), and $t$ is the time the money is invested for (5 years). Substituting these values, we get $A = 1230 \left(1 + \frac{0.06}{1}\right)^{1 \times 5} = 1230 \left(1.06\right)^5 = $1646.02$.

Use Compound Interest Formulas Use the Compound Interest Formulas A A =

Use Compound Interest Formulas
Use the Compound Interest Formulas A A =