The balance after 7 years will be $11240.60
Explanation:
We would apply the compound interest formula:
[tex]FV\text{ = P(1 + }\frac{r}{n})^{nt}[/tex]FV = future value = balance,
P = Principal = $7000
r = interest rate = 7%
n = number of times compounded per year = annually = 1 year
t = time = 7 years
[tex]FV\text{ = 7000(1 + }\frac{0.07}{1})^{1\times7}[/tex][tex]\begin{gathered} FV=7000(1+0.07)^7\text{ } \\ =7000(1.07)^7\text{ = 7000(}1.6058) \\ FV=\text{ \$11240.6} \end{gathered}[/tex]The balance after 7 years will be $11240.60
