Compound interest (annual)
Use A = P(1 + i)^n with annual compounding to find the future value of an investment. Unlimited questions, five difficulty levels, and a full worked solution every time — free.
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Jordan invests $2000.00 in a GIC that pays 4% interest per year, compounded annually. How much will the investment be worth after 3 years?
A = P(1 + i)n
Answer: 2249.73
See one solved, step by step
Jordan invests $1500.00 in a GIC that pays 5% interest per year, compounded annually. How much will the investment be worth after 2 years?
A = P(1 + i)n
📘 Worked solution
1i = 5100 = 0.05, n = 2Convert the annual rate to a decimal — that's what goes in the compound interest formula.
2A = 1500(1 + 0.05)2 = 1500(1.05)2Plug the principal, rate, and number of years into A = P(1 + i)^n.
3= 1653.75Evaluate the power, then multiply by the principal.
4Investment worth $1653.75Round money to the nearest cent.
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