Question
You invest $3,700 in an account that grows 4.5% each year. What will be your investment amount after 7 years?
Answers
GPT 3.5
To find the investment amount after 7 years, we need to calculate the compound interest.
Using the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the investment amount after time t
P = the principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times that interest is compounded per year
t = number of years
Given:
P = $3,700
r = 4.5% = 0.045 (as a decimal)
n = 1 (compounded annually)
t = 7 years
Plugging in the values into the formula, we get:
A = 3700(1 + 0.045/1)^(1*7)
A ≈ 3700(1 + 0.045)^(7)
A ≈ 3700(1.045)^7
A ≈ 3700(1.35972725)
Therefore, your investment amount after 7 years would be approximately $5,036.64.
Using the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the investment amount after time t
P = the principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times that interest is compounded per year
t = number of years
Given:
P = $3,700
r = 4.5% = 0.045 (as a decimal)
n = 1 (compounded annually)
t = 7 years
Plugging in the values into the formula, we get:
A = 3700(1 + 0.045/1)^(1*7)
A ≈ 3700(1 + 0.045)^(7)
A ≈ 3700(1.045)^7
A ≈ 3700(1.35972725)
Therefore, your investment amount after 7 years would be approximately $5,036.64.