Atticus invests $6,400 at 3.2% for 6 years. What is the expected maximum value of this investment? Round to the nearest whole number.(1 point)

1 answer

To calculate the future value of Atticus's investment, we can use 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 (initial investment).
  • \(r\) is the annual interest rate (decimal).
  • \(n\) is the number of years the money is invested for.

Given:

  • \(P = 6400\)
  • \(r = 3.2% = 0.032\)
  • \(n = 6\)

Now, let's plug the values into the formula:

\[ A = 6400(1 + 0.032)^6 \] \[ A = 6400(1.032)^6 \]

Calculating \((1.032)^6\):

\[ 1.032^6 \approx 1.207135 \]

Now substitute that back into the equation for \(A\):

\[ A \approx 6400 \times 1.207135 \approx 7725.66 \]

Rounding to the nearest whole number, the expected maximum value of the investment is:

\[ \boxed{7726} \]