Problema Solution
How much would $550 invested at 9% interest compunded annually be worth after 8 years?
Answer provided by our tutors
P = $550 the principle or present value
A = the future value
r = 0.09 or 9% the annual rate
t = 8 the number of years or the number of compounding periods
A = P(1 + r)^t
A = 550(1 + 0.09)^8
........
........
A = $1,095.91
After 8 years the worth will be $1,095.91.