Question

On the day that Tony was born his grandmother invested $2200 in a certificate of deposit that pays a 3% interest

rate compounded annually. How much money will there be in the account on his 16th birthday?

Answer 1

$3530.3541

Explanation:

Given that:

Principal = 2200

Interest rate compounded annually (r) = 3%

Time (t) = 16 years

Using the compound interest formula :

A = P(1 + r/n)^n*t

A = final amount

n = number of times interest is applied per period

A = 2200(1 + 0.03)^16

A = 2200(1.03)^16

A = 2200 * 1.60470643909878751793

A = $3530.3541

Hence, amount in account on his 16th birthday will be $3530. 3541