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How much money will you have after 10 years if you invest $2,500 into an account that pays 12% per year, compounded annually? (Remember, the formula is A = P(1 + r)t.)

A. $7,764.62
B. $8,784.14
C. $7,674.68
D. $7,846.07

Respuesta :

kudzordzifrancis

Answer:

A. $7,764.62

Step-by-step explanation:

The amount you will have after 10 years if you invest $2,500 into an account that pays 12% per year, compounded annually is given by

[tex]A=P(1+r\%)^t[/tex]

where [tex]t=10[/tex] years

[tex]r\%=0.12[/tex]

and P=$2,500

We substitute these values into the formula to obtain;

[tex]A=2500(1+0.12)^{10}[/tex]

This will give us;

[tex]A=2500(1.12)^{10}[/tex]

[tex]A=7764.6205[/tex]

We round to the nearest hundredth to obtain;

[tex]A=7,764.62[/tex]

The correct choice is A.

carlosego

Answer:

Option A

Step-by-step explanation:

We must use the compound interest formula:

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

Where

P is the initial amount = 2500

r is the annual interest rate =0.12

t is time in years = 10

A is the final amount

Then we substitute these values in the formula:

[tex]A = P(1 + r)^t\\\\A = 2500(1+0.12)^10\\\\A = 7,764.62[/tex]

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