Question

a principal of $2600 is invested at 5.5% interest, compounded annually. how much will the investment be worth after 9 years? use the calculator provided and round your answer to the nearest dollar.

Explanation:

Step1: Recall compound interest formula

The formula for compound interest (compounded annually) is:
$$A = P(1 + r)^t$$
Where:

• $A$ = final amount
• $P = 2600$ (principal)
• $r = 0.055$ (annual interest rate)
• $t = 9$ (time in years)

Step2: Substitute values into formula

$$A = 2600(1 + 0.055)^9$$

Step3: Calculate the growth factor

First compute $1.055^9$:
$$1.055^9 \approx 1.619094$$

Step4: Compute final amount

$$A = 2600 \times 1.619094 \approx 4209.64$$

Step5: Round to nearest dollar

Round $4209.64$ to the nearest whole number.

Answer:

$4210$