An amount of $ 1000 is placed in a 4-year investment which makes no interest payments but
yields 5.4% per annum compound. Calculate the amount expected to be received at the end of the
4 years.

To calculate the amount expected at the end of a 4-year investment with compound interest, we can use the compound interest formula:

\[
A = P \left( 1 + \frac{r}{100} \right)^t
\]

Where:
- $A$ is the amount at the end of the investment period.
- $P$ is the principal amount (initial investment).
- $r$ is the annual interest rate.
- $t$ is the time the money is invested for, in years.

Given:
- $P = 1000$ (initial investment),
- $r = 5.4\%$,
- $t = 4$ years,

We can now substitute these values into the formula:

\[
A = 1000 \left( 1 + \frac{5.4}{100} \right)^4
\]
\[
A = 1000 \left( 1 + 0.054 \right)^4
\]
\[
A = 1000 (1.054)^4
\]

Now, let's calculate $ (1.054)^4 $:

\[
A = 1000 \times 1.2331 = 1233.10
\]

Thus, the amount expected to be received at the end of the 4 years is **$1233.10**.

Would you like more details or further explanation?

Here are 5 related questions:
1. What is the formula for compound interest with monthly compounding?
2. How would the result change if the interest was compounded quarterly?
3. Can you explain the difference between simple and compound interest?
4. What happens if the investment is for a longer period, say 10 years, at the same rate?
5. How can you calculate the interest earned separately from the total amount?

**Tip:** For compound interest, the longer the time period or the higher the interest rate, the more significant the growth of the investment.

An amount of $1000 is placed in a 4-year investment which makes no interest payments but yields 5.4% per annum compound. Calculate the amount expected to be received at the end of the 4 years.

Learn how to calculate the final amount of a 4-year investment with a 5.4% annual compound interest rate. Using the formula A = P(1 + r/100)^t, this problem demonstrates key financial math concepts suitable for Grades 9-12.

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