Question

Find the final total value of a 5-year investment of $2600 at a simple annual rate of
3.53%

Answer 1

A = $3,101.09

A = P + I where

P (principal) = $2,600.00

I (interest) = $501.09

Explanation:

First, convert R as a percent to r as a decimal

r = R/100

r = 3.53/100

r = 0.0353 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 2,600.00(1 + 0.0353/12)(12)(5)

A = 2,600.00(1 + 0.002941667)(60)

A = $3,101.09

Summary:

The total amount accrued, principal plus interest, with compound interest on a principal of $2,600.00 at a rate of 3.53% per year compounded 12 times per year over 5 years is $3,101.09.