The formula is
A=p(1+r/n)^nt
A future value ?
P present value 672
R interest rate 0.071
N compounded monthly 12
T time 14 years
A=672×(1+0.071÷12)^(12×14)
A=1,810.45
Hope it helps!
Answer:
The CD will be worth $1810.44 in 14 years.
Step-by-step explanation:
This is a compound interest problem:
The compound interest formula is given by:
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.
In this exercise, we have:
[tex]P = 672[/tex]
[tex]r = 0.071[/tex].
There are 12 months in a year, and so, 12 compoundings in a year. So [tex]n = 12[/tex].
We want to know the CD's worth in 14 years. So [tex]t = 14[/tex].
So
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]A = 672(1 + \frac{0.071}{12})^{12*14}[/tex]
[tex]A = 1810.44[/tex]
The CD will be worth $1810.44 in 14 years.
