If $8,000 is invested at 6.5% for 7 years, find the future value if the interest is compounded daily. Use a 365 day year. A) $12,600.09 B $12,608.88 C) $12,609.08 D $12,604.73 E $12,607.83

Algebra and Trigonometry (6th Edition)
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Author:Robert F. Blitzer
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ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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**Compound Interest Problem**

**Question:**
If $8,000 is invested at an annual interest rate of 6.5% for 7 years, find the future value of the investment if the interest is compounded daily. Assume a 365-day year.

**Options:**

- **A)** $12,600.09
- **B)** $12,608.88
- **C)** $12,609.08
- **D)** $12,604.73
- **E)** $12,607.83

**Explanation:**
To solve this problem, use the compound interest formula:

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

Where:
- \( A \) is the future value of the investment/loan, including interest.
- \( P \) is the principal investment amount ($8,000).
- \( r \) is the annual interest rate (decimal) (0.065).
- \( n \) is the number of times that interest is compounded per unit year (365).
- \( t \) is the time the money is invested for in years (7).

Plug in the values to calculate the future value.
Transcribed Image Text:**Compound Interest Problem** **Question:** If $8,000 is invested at an annual interest rate of 6.5% for 7 years, find the future value of the investment if the interest is compounded daily. Assume a 365-day year. **Options:** - **A)** $12,600.09 - **B)** $12,608.88 - **C)** $12,609.08 - **D)** $12,604.73 - **E)** $12,607.83 **Explanation:** To solve this problem, use the compound interest formula: \[ A = P \left(1 + \frac{r}{n}\right)^{nt} \] Where: - \( A \) is the future value of the investment/loan, including interest. - \( P \) is the principal investment amount ($8,000). - \( r \) is the annual interest rate (decimal) (0.065). - \( n \) is the number of times that interest is compounded per unit year (365). - \( t \) is the time the money is invested for in years (7). Plug in the values to calculate the future value.
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