The worth after 4 years is $ 680.24
Solution:
The formula for compound interest, including principal sum, is:
Where,
A = the future value of the investment
P = the principal investment amount
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per unit t
t = the time the money is invested
From given,
n = 1 ( since interest is compounded annually)
p = 500
t = 4
Substituting the values we get,
Thus the worth after 4 years is $ 680.24