Question

A principal of $2700 is invested at 8.75% interest, compounded annually. how much will the investment be worth after 8 years

Answer 1

The formula for compounding interest is

F= P(1+i)^n

where F is the future worth, P is the principal amount, i is the interest, and n is the number of years. Applying this equation,

F = 2700(1+0.0875)^8
F = $ 5282

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