Question

Use the formula for computing future value using compound interest to determine the value of an account at the end of 7 years if a principal amount of $2,500 is deposited in an account at an annual interest rate of 4% and the interest is compounded daily. (Assume there are 365 days in a year.) Round to the nearest cent as needed.)

The amount after 7 years will be ?

Answer 1

In 7 years, you will have $3,307.77

Formula:
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 (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for