principal of $1900 is invested at 6% interest, compounded annually. How much will the investment be worth after 11 years?Use the calculator provided and round your answer to the nearest dollar.$
Solution
To calculate the future value of an investment with annual compounding interest, you can use the formula:
A = P (1 + r/n) ^ nt
Where: A = the amount of money accumulated after n years, including interest. P = principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years
In this case: P = $1900 r = 6% or 0.06 (in decimal) n = 1 (since the interest is compounded annually) t = 11 years
Substitute these values into the formula:
A = 1900 (1 + 0.06/1) ^ (1*11)
Solving the equation:
A = 1900 (1.06) ^ 11
Using a calculator to compute this, you get:
A = $3615.58
Rounding to the nearest dollar, the investment will be worth approximately $3616 after 11 years.
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