Algebra 1 9th grade

Question

You invested $475 in an account with 8.5% interest for 12 years. How much money will you have at the end of 12 years?

Answer 1

In order to determine the future value of this investment ($475 at an 8.5% interest rate, over 12 years), we can apply the compound interest formula:

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

where A is the future value of the investment, taking the interest rate into account, P is the initial principal amount ($475 in this case), r is the annual interest rate (in decimal form, 8.5% becomes 0.085), n is the number of times that the interest is compounded per year (in this case, we assume annual compounding, with n = 1), and t is the amount of time the money is invested or borrowed for, in years (12 years).

Plugging these quantities in, we have

A = 475(1 + 0.085/1)^(1*12)

A ≈ 1,257.32

In conclusion, the account will have $1,257.32, rounded to the nearest penny, after 12 years.