Step-by-step explanation:
Let's look at what we know. We know that...
P=2000
r=0.04 (Change 4% to a decimal)
t=7 (25 years minus 18 years equals 7)
n=1
Since we are compounding each year, we need to use this equation: [tex]P(1+\frac{r}{n} )^{nt}[/tex]
Now just plug the numbers in: (Answer to #1:) [tex]2000(1+\frac{0.04}{1} )^{(1*7)}[/tex]
This equals 2631.86
When we round, this equals to $2,632. (Answer to #2).
