Accumulated Value

Question

use: A=P [1+r/n]^nt   and a=p^rt to solve

Find the accumulated value of an investment of $940 at 6% compounded annually for 6 years

Answer 1

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

• A(t) = value of investment at year t
• P = initial value of the investment = $940
• r = rate as a decimal = 6% = 0.06
• n = number of compoundings per year = annual = 1
• t = years = 6

 

Plug in the numbers and use your calculator to get the answer.