What Will Your $440 Be Worth in 8 Years?

Question: Your $440 gets 5.8% compounded annually for 8 years. What will your $440 be worth in 8 years? Final answer: Your $440 will be worth approximately $700.13 in 8 years.

Understanding Compound Interest:

Compound interest is a concept where interest is calculated on the initial principal amount, including all previously accumulated interest. This results in the total amount growing at an increasing rate over time.

Calculating Final Amount:

To calculate the final amount after 8 years of 5.8% annual compound interest on $440, we can use the compound interest formula:

A = P(1 + r/n)^(nt)

Where:

  • A is the final amount
  • P is the principal amount ($440)
  • r is the annual interest rate (5.8%)
  • n is the number of times interest is compounded per year (annually)
  • t is the number of years (8 years)

Plugging in Values:

Substitute the given values into the formula:

A = $440(1 + 0.058/1)^(1*8)

Calculating Final Worth:

Simplify and calculate the equation:

A = $440(1.058)^8

A = $440(1.593848)

A ≈ $700.13

Therefore, your $440 will be worth approximately $700.13 in 8 years with compound interest.

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