About how much should a financial investment of $10,000 be worth after six years if it earns a compounded yearly interest of 5%?

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we have:

A = P(1+r/n)^(nt)

where A is the final amount, P is the principal (initial investment), r is the annual interest rate as a decimal, n is the number of times the interest is compounded per year (in this case, once per year), and t is the number of years.

Plugging in the given values, we get:

A = 10000(1+0.05/1)^(1*6) = $13,382.15

Therefore, the closest answer choice is D) $13,400.

About How Much Should a Financial Investment of $10,000 Be