**Finding the Future Value and Interest for an Investment Earning Compound Interest**The Clarks are saving up to go on a family vacation in 5 years. They invest $2300 into an account with an annual interest rate of 1.44% compounded annually.**Task:**Answer the questions below. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas.(a) Assuming no withdrawals are made, how much money is in the Clarks' account after 5 years?- $______(b) How much interest is earned on the Clarks' investment after 5 years?- $______**Instructions:**1. Calculate the future value of the investment using the compound interest formula.2. Find the total interest earned by subtracting the initial investment from the future value.To solve, use the formula for compound interest:\[ A = P(1 + r/n)^{nt} \]Where:- $ A $ is the amount of money accumulated after n years, including interest.- $ P $ is the principal amount (the initial amount of money).- $ r $ is the annual interest rate (decimal).- $ n $ is the number of times that interest is compounded per year.- $ t $ is the time the money is invested for in years.

To Find: Interest earned Future Value

The Clarks are saving up to go on a family vacation in 5 years. They invest $2300 into an account with an annual interest rate of 1.44% compounded annually. Answer the questions below. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas.

The Clarks are saving up to go on a family vacation in 5 years. They invest $2300 into an account with an annual interest rate of 1.44% compounded annually. Answer the questions below. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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