An initial investment of $557.33 grows at a rate of 5 percent per year.What is the value of the investment after 4 years? Round your answer to the nearest cent.
A) $585.20
B) $668.80
C) $677.44
D) None of the above

Question

An initial investment of $557.33 grows at a rate of 5 percent per year.What is the value of the investment after 4 years? Round your answer to the nearest cent. ​
A) $585.20
B) $668.80
C) $677.44
D) None of the above

Quizplus · Accepted Answer

The value of the investment after 4 years can be calculated using the formula for compound interest: A = P(1 + r)^n, where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial investment), r is the annual interest rate (decimal), and n is the number of years the money is invested for. Here, P = $557.33, r = 5% = 0.05, and n = 4. So, A = $557.33(1 + 0.05)^4 ≈ $677.44.

An Initial Investment of $557