4. an investment of $600 increases at a rate of 4% per year. find the value of investment after 12…

4. an investment of $600 increases at a rate of 4% per year. find the value of investment after 12 years.\na) $938\nb) $944\nc) $961\nd) $983

4. an investment of $600 increases at a rate of 4% per year. find the value of investment after 12 years.\na) $938\nb) $944\nc) $961\nd) $983

Answer

Explanation:

Step1: Identify compound - interest formula

The compound - interest formula 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 $r = 4%=0.04$, $P=$600$, and $t = 12$ years.

Step3: Substitute values into the formula

$A=600\times(1 + 0.04)^{12}$. First, calculate $(1 + 0.04)^{12}$. Using a calculator, $(1.04)^{12}\approx1.601032$. Then, $A = 600\times1.601032\approx960.62$. Rounding to the nearest whole number, $A\approx961$.

Answer:

C. $961$