Solution - Compound interest (basic)

1115.72

1115.72

Step-by-step explanation

Use $A = P {(1 + r / n)}^{(n t)}$ with $P = 870$ , $r = 1 %$ , $n = 1$ , $t = 25$ .

Compute period rate and exponent: $\frac{r}{n} = 0.01$ , $n t = 25$ , so the growth factor is $1.282431995$ .

Multiply principal by growth factor: $870$ × $1.282431995$ = $1115.72$ .

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Compound interest appears in savings, loans, and investments. Understanding it builds strong financial literacy.