First, we determine the effective interest rate of the given compound interest.
ieff = (1 + r/n)^n - 1
where r is the given original rate and n is the number of compounding. In a year, there are approximately 52 weeks.
ieff = (1 + 0.07/52)^52 - 1
ieff = 0.07246 = 7.246%
Then, we calculate for the future worth of money after five years using the effective interest annually.
F = P (1 + r)^n
Substituting,
F = ($9250)*(1 + 0.07246)^5
= $13,123.29
Thus, the value of the investment after 5 years is approximately equal to $13,123.29.
