Use the compound interest formula to compute the future value of the investment.
-$700 at 6.5% compounded daily for 11 years (assume 360 days per year)

Question

Quizplus · Accepted Answer

The future value of an investment using compound interest is calculated with the formula $A = P(1 + \frac{r}{n})^{nt}$, 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. Plugging in the given values: $P = $700$, $r = 6.5\% = 0.065$, $n = 360$, and $t = 11$, we get $A = 700(1 + \frac{0.065}{360})^{360*11}$, which calculates to approximately $1430.84.

Use the Compound Interest Formula to Compute the Future Value