Question

Lindsay puts $1000 in a bank account that earns 4% compound interest per year. How much will be in her bank account after 7 years? Round your answer to the nearest hundredths place.

Answer 1

`\$1,315.93`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=7\ years\\ P=\$1,000\\ r=0.04\\n=1`

substitute in the formula above

`A=\$1,000(1+(0.04)/(1))^(1*7)=\$1,315.93`