How much money will you have after 10 years if you invest $2,500 into an account that pays 12% per year, compounded annually? (Remember, the formula is A = P(1 + r)t.) A. $7,764.62 B. $8,784.14 C. $7,674.68 D. $7,846.07
Accepted Solution
A:
Answer:A. $7,764.62Step-by-step explanation:The amount you will have after 10 years if you invest $2,500 into an account that pays 12% per year, compounded annually is given by[tex]A=P(1+r\%)^t[/tex]where [tex]t=10[/tex] years[tex]r\%=0.12[/tex]and P=$2,500We substitute these values into the formula to obtain;[tex]A=2500(1+0.12)^{10}[/tex]This will give us;[tex]A=2500(1.12)^{10}[/tex][tex]A=7764.6205[/tex]We round to the nearest hundredth to obtain;[tex]A=7,764.62[/tex]The correct choice is A.