4% compound interest per annum. You invest $5200. After 5 years how much do you have total ?

1 Answer
Sam F.
Feb 26, 2018

$6326.60

Explanation:

#FV=P*(1+r/n)^(nt)#

where

#FV# = Future Value
#P# = principal invested
#r# = interest rate (as a decimal)
#n# = number of compounding periods per year
#t# = number of years invested

Since your problem is annual interest, #n# doesn't play a role.

Thus, we have:

#FV=5200(1+.04)^5=5200(1.04)^5=$6,326.60#

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