What sum of money will grow to 610868 in nine years at 16 co

What sum of money will grow to $6108.68 in nine years at 1.6% compounded annually? The sum of money is $. (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Solution

Answer :

Annual compound interest formula :

The formula for annual compound interest is A = P (1 + r/n) ^ nt:

Where:

A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for

We have P = $6108.68 , r = 1.6% = 0.016, n = 1 , t = 9 years

So that the sum of money is A = 6108.68( 1 + 0.016)⁹

                                                           = 6108.68(1.016)⁹

                                            =   7046.7855

Therefore , the sum of money is $ 7046. 7855