Answer:
[tex]\$620.07[/tex]
Step-by-step explanation:
we know that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
[tex]t=2\ years\\A=\$700\\ r=0.0625\\n=1[/tex]
substitute in the formula above and solve for P
[tex]700=P*(1+\frac{0.0625}{1})^{2}[/tex]
[tex]700=P*(1.0625)^{2}[/tex]
[tex]P=700/(1.0625)^{2}[/tex]
[tex]P=\$620.07[/tex]
