Zola is thinking about investing $8,000 at 4.9% for 7 years. What is the maximum value Zola can expect this investment to achieve? Round to the nearest ten. (1 point)

Question

maximum value =$
Remaining Attempts : 3

Answer 1

To calculate the maximum value of Zola's investment, we can use the formula for compound interest, which is:

\[ A = P(1 + r)^t \]

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).
• \( t \) is the time the money is invested for (in years).

Given:

• \( P = 8000 \)
• \( r = 4.9% = 0.049 \)
• \( t = 7 \)

Now we can plug these values into the formula:

\[ A = 8000(1 + 0.049)^7 \] \[ A = 8000(1.049)^7 \] \[ A \approx 8000(1.403264) \] \[ A \approx 11226.11 \]

Now, rounding to the nearest ten:

\[ A \approx 11230 \]

So, the maximum value Zola can expect this investment to achieve is $11,230.