To find the amount Rob will have in 5 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or the loan is held for
In this case, Rob has:
P = $7,869
r = 13% = 0.13 (as a decimal)
n = 1 (compounded annually)
t = 5 years
Plugging these values into the formula, we get:
A = 7,869(1 + 0.13/1)^(1*5) = 7,869(1.13)^(5)
Calculating this expression, we find:
A ≈ 7,869(1.13)^5 ≈ 7,869(1.822) ≈ $14,337.60
Therefore, to the nearest cent, Rob will have $14,337.60 in 5 years.
Rob has $7,869 in an account that earns 13% interest compounded annually.
To the nearest cent, how much will he have in 5 years?
1 answer
1 answer