You invest $13,000 in Rapid Growth Funds, which appreciate by 2% per year, with yields reinvested quarterly. By how much will your investment have grown after 7 years Round your answer to the nearest cent. ?

Question

You invest $13,000 in Rapid Growth Funds, which appreciate by 2% per year, with yields reinvested quarterly. By how much will your investment have grown after 7 years  Round your answer to the nearest cent. ?

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + \frac{r}{n})^{nt}$, 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 (decimal), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years. Given that $P = \$13,000$, $r = 0.02$ (2% annual interest rate), $n = 4$ (compounded quarterly), and $t = 7$ years, we calculate $A$ as follows:$$A = 13000(1 + \frac{0.02}{4})^{4*7}$$$$A = 13000(1 + 0.005)^{28}$$$$A = 13000(1.005)^{28}$$$$A ≈ 13000 * 1.149562$$$$A ≈ \$14943.31$$Since none of the provided options match this calculation, the correct answer is E) None of these.

You Invest $13,000 in Rapid Growth Funds, Which Appreciate by 2