An investment grows at 12% annually. If you invest $5000, how much will you have after 4 years with compound interest?
Answer
$7884.64
How to solve it
1
Year 1: $5000 × 1.12 = $5600
2
Year 2: $5600 × 1.12 = $6272
3
Year 3: $6272 × 1.12 = $7024.64
4
Year 4: $7024.64 × 1.12 = $7867.60
Hints
Multiply by 1.12 each year
Or use $5000 × 1.12^4