a principal of $1800 is invested at 7.25% int...
a principal of $1800 is invested at 7.25% interest, compounded annually. how much will the investment be worth after 12 years? use the calculator provided and round your answer to the nearest dollar.
Answer
# Explanation:
## Step1: Identify 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 (the initial amount of money), $r$ is the annual interest rate (in decimal form), and $t$ is the number of years the money is invested for.
## Step2: Convert the interest rate to decimal
Given $r = 7.25\%=0.0725$, $P = 1800$, and $t = 12$.
## Step3: Substitute values into the formula
$A=1800\times(1 + 0.0725)^{12}$.
First, calculate $(1 + 0.0725)^{12}$. Using a calculator, $(1 + 0.0725)^{12}\approx2.3817$.
Then, $A = 1800\times2.3817$.
$A=4287.06$.
# Answer:
$\$4287$