How much would $200 invested at 7% interest compounded annually be worth after 5 years? Round your answer to the nearest cent.

Question

asked Dec 26, 2020 147k views

1 Answer

Jacob Foshee · Answer 1 · 2021-01-02T02:18:00+0000

use the Compound Amount formula:

A = P (1 + r)^t, where P is the principal, r is the interest rate as a decimal fraction, and t is the number of years

Here, A = $200 (1 + 0.07)^5 = $500(1.07)^5 = $280.51.

The interest earned would be $80.51