Answer:
$55,931.49
Explanation:
The formula for compound interest is to be used for this question
FV = P(1+r)^n
Where:
FV = Future Value of investment
P = Principal
r = Interest rate
n = Number of years
P = $12,000
r = 8%
n = 20 years
FV = 12,000(1+8%)^20
FV = 12,000(1+.08)^20
FV = 12,000(1.08)^20
FV = 12,000(4.660957144)
FV = 55,931.48573
FV = $55,931.49 (To 2 Decimal Places)
That is, the investment $12,000 will become the sum of $55,931.49 in 20 years at 8% annual rate of return compounded annually
Answer
Compound interest=P(1+I)^-1
Where P=principal
I=norminal annual interest rate in percentage.
^=Compounding periods.
Therefore,
#12,000(1 +0.08)20
=12,000(1.08)^20
=12,000(4.660_1)
=12,000(3.666)
=43,920
In twenty years ,I will have #43,920 dollars.
Explanation:
