Question

If a person invests $120 at 8% annual interest, find the approximate value of the investment at the end of 5 years.

Answer 1

Put into the formula:

120(1+.08)^5

Equals:

176.3193692 dollars

Answer 2

Not sure ifyou want simple interst or compound interest

if you want simple then go to AAAAAAAAAA
if compound then go to BBBBBBBB




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simple interest
I=PRT
initerest=I
P=prinicpal=amount invested
R=rate in decimal
t=time in years

so given
P=120
R=8%=0.08
t=5
so
I=(120)(0.08)(5)=48
the total investment is interest+investment=48+120=$168



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compound interst for yearly compounded
$A=P(1+r)^t$
A=final amount
P=principal
r=rate in decimal form
t=time in years

given
P=120
r=8%=0.08
t=5

$A=120(1+0.08)^5$
$A=120(1.08)^5$
use your calculator
A=176.319
round to nearest cent
A=$176.32






so
if simple interest, then the investment is worth $168
if compound interest, then the investment is worth $176.32