SOLUTION: Determine the value of an investment in the amount of $5000 that matures in 4 years and pays 4.5% per year compounded as indicated. How to use the anual formula for compound int

Question 870237: Determine the value of an investment in the amount of $5000 that matures in 4 years and pays 4.5% per year compounded as indicated.
How to use the anual formula for compound interest here?
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
Determine the value of an investment in the amount of $5000 that matures in 4 years and pays 4.5% per year compounded as indicated.
How to use the annual formula for compound interest here?
***
compound interest formula: A=P(1+i)^n, P=initial investment, i=interest rate per period, n=number of compounding periods, A=amt after n-periods.
..
For given problem:
P=5000
i=4.5%
n=4
..
A=5000(1+.045)^4
A=5000(1.045)^4≈$5963
..
note: I use a modified version of the compound interest formula found in most textbooks.
In this case, the compounding period is one year.
RELATED QUESTIONS
If $5000 is invested at an interest rate of 4% each year, what is the value of the... (answered by stanbon)

Sara deposit $ 11,000 in an account that pays 2.5% compounded annually. Determine the... (answered by jorel1380)

Susan invests R45 000 at a simple interest rate of 6% per year. Two years later, she adds (answered by )

Jorge invests an amount of $5,000 in a money market account at an annual interest rate of (answered by math_tutor2020)

Calculate, to the nearest cent, the future value FV(in dollars) of an investment of... (answered by ikleyn)

Lorena is investing a $5000 inheritance from her aunt in a certificate of deposit that... (answered by solver91311)

Investment: The Dreyfus stocks have returned an average of 14.9% per year for the past... (answered by stanbon)

A bank note will be worth $86,500 when it matures in 6 years. If the note pays 3.98% per... (answered by Fombitz)

A principal of $5000 is invested at 4% interest rate compounded monthly. Write the... (answered by stanbon)