Answer :
The worth after 4 years is $ 680.24
Solution:
The formula for compound interest, including principal sum, is:
[tex]A = p(1+\frac{r}{n})^{nt}[/tex]
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
[tex]r = 8 \% = \frac{8}{100} = 0.08[/tex]
Substituting the values we get,
[tex]A = 500(1+ \frac{0.08}{1})^{1 \times 4}\\\\A = 500(1.08)^4\\\\A = 500 \times 1.36048896\\\\A = 680.24448 \approx 680.24[/tex]
Thus the worth after 4 years is $ 680.24