Problem PageQuestion

A principal of 3700 is invested at 4.75 %interest, compounded annually. How much will the investment be worth after 5 years?

The investment will be worth $4686.62 after 5 years.

Step-by-step explanation:

Principal, P = 3700

Rate, r = 4.75% = 0.0475

Number of years, t = 5 years

Number of times compounded, n = 5 times

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

⇒ 3700 (1 + 0.0475/5) ^25

⇒ 3700 (5.0475/5) ^25

⇒ 3700 (1.0095) ^25

⇒ 4686.62

∴ Amount = $4686.62