christopher invested $1,000 in an account paying an interest rate of 5.8% compounded annually. assuming no…
christopher invested $1,000 in an account paying an interest rate of 5.8% compounded annually. assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 7 years?
Answer
Explanation:
Step1: Identify the compound - interest formula
The compound - interest formula is $A = P(1 + r)^t$, where $A$ is the amount of money accumulated after $n$ years, including interest, $P$ is the principal amount ($P=$1000$), $r$ is the annual interest rate (as a decimal, $r = 0.058$), and $t$ is the time the money is invested for in years ($t = 7$).
Step2: Substitute the values into the formula
Substitute $P = 1000$, $r=0.058$, and $t = 7$ into the formula: $A=1000\times(1 + 0.058)^7$. First, calculate $(1 + 0.058)=1.058$. Then, find $(1.058)^7$. Using a calculator, $(1.058)^7\approx1.47745$. Next, multiply by the principal: $A = 1000\times1.47745=$1477.45$.
Answer:
$$1477$