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2 September, 11:37

How much would $200 invested at 7% interest compounded annually be

worth after 5 years? Round your answer to the nearest cent.

A (t) = P (1+5)

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Answers (1)
  1. 2 September, 12:04
    0
    Step-by-step explanation:

    Initial amount invested in the account is $200 This means that the principal, P = $200

    It was compounded annually. This means that it was compounded once in a year. So

    n = 1

    The rate at which the principal was compounded is 7%. So

    r = 7/100 = 0.07

    It was compounded for 5 years. So

    t = 5

    The formula for compound interest is

    A = P (1+r/n) ^nt

    A = total amount in the account at the end of t years. Therefore

    A = 200 (1+0.07/1) ^1*5

    A = 200 (1.07) ^5 = 200 * 1.402552

    A = $280.51
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