You have located an investment that pays 9 percent per year. You invest $800. How much will you have in seven years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Blank.xlsx

Question

BlackTom AI · Accepted Answer

Start by identifying the core formula for the problem: the future value with annual compounding is FV = P × (1 + r)^t, where P is the initial principal, r is the annual rate, and t is the number of years.

First, plug in the given numbers: P = 800, r = 0.09, t = 7. So FV = 800 × (1 + 0.09)^7 = 800 × (1.09)^7.

Next, compute (1.09)^7 step by step without rounding intermediate results:
- (1.09)^2 = 1.1881
- (1.09)^3 = 1.1881 × 1.09 = 1.295029
- (1.09)^4 = 1.295029 × 1.09 = 1.41158161
- (1.09)^5 = 1.41158161 × 1.09 = 1.5386239549
- (1.09)^6 = 1.5386239549 × 1.09 = 1.6771001118
- (1.09)^7 = 1.6771001118 × 1.09 = 1.8280341218
Thus, (1.09)^7 ≈ 1.8280341218.

Then multiply by the principal to get the future value: 800 × 1.8280341218 ≈ 1462.42729744.

Finally, round to two decimal places as requested: 1462.43.

Note: The given answer 1466.85 does not match the calculated value, indicating a possible arithmetic error in intermediate steps or rounding. The key is to keep all intermediate calculations exact until the final rounding step, as shown above.

If a student were to verify quickly, they could also use a calculator or spreadsheet function like =800*(1+0.09)^7 and then round to two decimals.

FIN.256.M016.FALL25.Principles of Finance LockDown Browser Test FIN.256.M016.FALL25.Principles of Finance LockDown Browser Test

You have located an investment that pays 9 percent per year. You invest $800. How much will you have in seven years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Blank.xlsx

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FIN.256.M016.FALL25.Principles of Finance LockDown Browser Test FIN.256.M016.FALL25.Principles of Finance LockDown Browser Test

You have located an investment that pays 9 percent per year. You invest $800. How much will you have in seven years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Blank.xlsx

查看解析

登录即可查看完整答案

类似问题

Part 1Consider a twominus−year ​investment: Given a constant and positive interest​ rate, the interest earned in the second year will be greater than the interest earned in the first year​ (assuming annual​ compounding). Part 1 True False

If Jack and Jill deposit $1,000 into a savings account that earns 4.5% annual interest (compounded monthly), how long will it take for their money to double to $2,000?

How much will you get back on a five year investment of $100 that pays 5% interest per year?

What is the effective yield (APY) if the Annual Percentage Rate (APR) is 7.64 percent and it is compounded quarterly?

If you deposit $10,000 in an account with an annual rate of 9% compounded semiannually, how long will it take for you to have $2,000,000 in the account?

In order to determine the future value of some lump sum, we must use the process of ________.

With compound interest, the investor earns interest on the principal amount invested plus interest on accumulated interest. Which of the following compounding frequencies would yield the investor the greatest ending balance assuming all else is equal?

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更多留学生实用工具

希望你的学习变得更简单

Part 1Consider a twominus−year investment: Given a constant and positive interest rate, the interest earned in the second year will be greater than the interest earned in the first year (assuming annual compounding). Part 1 True False