Lux Investing
Find the value of investing $500 for 5 years with the interest rate of 4.75% compounded annually.?
The answer is $630.58, but how do I arrive at that answer?
Public Comments
- T = P(1 + r/n)^(nt) T = 500(1 + 0.0475/1)^(5*1) T =~ 630.58
- $630.58 = 500(1+0.0475)^5 630.58 = 500* (1.2612) A = P*(1+r)^t Where, P = principal amount (initial investment) r = annual nominal interest rate (as a decimal) t = number of years A = amount after time t
