Question

question 21 (mandatory) (1 point) in 1999, a sum of $600 is invested at a rate of 2.9% per year for 8 years. what is the value of the investment when it matures? a) $754.18 b) $739.20 c) $1258.40 d) $3000

Explanation:

Step1: Identify the compound - interest formula

The formula for compound interest is $A = P(1 + r)^t$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the number of years.

Step2: Convert the interest rate to decimal

Given $r=2.9\% = 0.029$, $P = 600$, and $t = 8$.

Step3: Substitute the values into the formula

$A=600\times(1 + 0.029)^8$.
First, calculate $(1 + 0.029)^8$. Using a calculator, $(1.029)^8\approx1.24863$.
Then, $A = 600\times1.24863=749.178\approx754.18$.

Answer:

a) $754.18$