Question

You invest $2000 in an account at 4.5% per year simple interest. How much will you have in the account at the beginning of the 8th year? Round your answer to the nearest whole dollar.

Answer 1

Answer: 2720

Explanation:

just did the test

Answer 2

I will have $2721 at the beginning of the eighth year.

The beginning of the eighth year is the end of seven years of investing.

The formula for the future value (FV) of my investment is

FV = C(1 + r)^n

where C = my initial cash

r = the interest rate

n = the number of years

FV = $2000(1.045)^7 = $2722