Question

an initial investment of $1,500 over 25 years at 5% APR. After 10 years about how much interest has the investment earned?

Answer 1

Assuming that continuous compounding is in effect, the investment value can be tracked exponentially by the expression:
v(t)=1500e^(r*t) where r=0.05 (rate per year) and t is the number of years
Plug in any value of t and you'll know the investment value after those number of years have elapsed

Answer 2

problem needs to specify whether it is simple interest or compoinded yearly @SerinaRenee

Answer 3

compounded

Answer 4

compounded yearly, right ?

Answer 5

if they dont specify the period of compounding, we can assume it is yearly as it is the case for most banks..

Answer 6

check top of your question and see if they tell anything about period of compounding

Answer 7

yeah its yearly

Answer 8

great ! we can use compound interest formula then... can you check your notes and see if you have it handy

Answer 9

A=P(1+r)^t

Answer 10

ty :) lets plugin the values

Answer 11

P = initial investment = 1500
r = interest rate = 5 % = 5/100
t = time = 10
A = final investment

Answer 12

plug them and see what you get for final investment A

Answer 13

Do you guy's actually remember formula
first year 1,500(1+.05)
second year 1,500(1+.05)(1+.05)=1,500(1+.05)^2
24 years 1,1500(1+.05)^25=5,079.53
I can never remember formulas that why I leaned to derive them