Find amount of money you will have after 5 years if 14,000 is invested in accounts of paying 8.25% interest compounded

Question

mathstudent55 · Answer

You haven't finished the problem. How often is the interest compounded?

anonymous · Answer

anually

mathstudent55 · Answer

Ok.
There is a formula for compound interest.

anonymous · Answer

do you want me to find it?

mathstudent55 · Answer

$A = P(1 + \dfrac{r}{n})^{nt} $

where A is future value
P is the principal amount now
r is the annual rate of interest written as a decimal
n is the number of times the interest is compounded per year
t is the number of years

mathstudent55 · Answer

Just plug in all your values and evaluate A.

anonymous · Answer

is 14,000 the principal amount?

funnyguy2 · Answer

Can not be answered unless you answer this:
 How often is the interest compounded?

anonymous · Answer

I'm not sure, how do I find out?

anonymous · Answer

??

mathstudent55 · Answer

$\Large A = 14,000(1 + \dfrac{0.0825}{1})^{1\times 5}$

mathstudent55 · Answer

$\Large A = 14,000(1 + 0.0825)^{5}$

$\Large A = 14,000(1.0825)^{5}$

anonymous · Answer

The answer I got is 20809.78345

mathstudent55 · Answer

Now raise 1.0825 to the 5th power an multiply by 14,000.

mathstudent55 · Answer

Let me do it.

mathstudent55 · Answer

Correct.