Question

determine the value of $1000 invested for 5 years at 12%, with 12% compounded annually.

idk why but I have such a hard time trying to understand the whole compounding concept ;_;

Answer 1

\[A=P(1+\frac{r}{n})^{nt}\]

Answer 2

P is the principal or original amount.
r is the interest rate expressed as a decimal
n is the number of times the interest is compounded in 1 year
t is the number of years

Answer 3

so for my n, will it be just 1, since it is compounded annually (per year)

Answer 4

yes

Answer 5

thank you so much!

Answer 6

yw. What did you get?

Answer 7

$1762.34

Answer 8

yep