If $540 is invested in an account that earns 19.75%, compounded annually, what will the account balance be after 12 years? (Round your answer to the nearest cent.)

Question

If $540 is invested in an account that earns 19.75%, compounded annually, what will the account balance be after 12 years? (Round your answer to the nearest cent.)
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Henry · Answer

P = Po(1+r)^n. r = 19.75% / 100% = 0.1975 = APR exprssed as a decimal. n = 1Comp/yr * 12yrs. = 12 Compounding periods. P = 540(1.1975)^12 = $4695.70