$9000 invested at an APR of 9% for five years. In interest is compounded annually, what Ia the amount of money after 5 years?
1.09^5 = 1.5386
1.5386 * 9000 = $ 13,847.62
To calculate the amount of money after 5 years with an annual interest rate and compounded annually, you can use the formula for compound interest:
A = P * (1 + r/n)^(n*t)
Where:
A = the future value of the investment
P = the principal amount (initial investment)
r = annual interest rate (expressed as a decimal)
n = number of times the interest is compounded per year
t = number of years
In this case:
P = $9000
r = 9% = 0.09 (as a decimal)
n = 1 (compounded annually)
t = 5 years
Plugging the values into the formula, we get:
A = $9000 * (1 + 0.09/1)^(1*5)
A = $9000 * (1.09)^5
A = $9000 * 1.5386246
A ≈ $13,847.62
Therefore, the amount of money after 5 years would be approximately $13,847.62.