Question

Arlo invested $4000 in an account that earns 5.5% interest, compounded annually. The formula for compound interest is A(t)= p(1+I)^t

How much did Arlo have in the account after 4 years

Answer 1

Amount = $ 4955.29

Explanation:

Given in question as

Mr. Arlo have Principal of $ 4000

He keep this amount in his bank account for 4 years having interest rate of 5.5 % at compounded annually .

As This is on Compound method so,

from compound interest method

Amount (A) = Principal (P) (
`1+ (Rate)/(100)`)^T

So, A = 4000(
`1+(5.5)/(100)`)^4

Or, A = 4000(1.2388)

Or, A = 4000×1.2388

∴ Amount = 4955.29

Hence ,

The amount which Mr. Arlo have in his account after 4 years = $4955.25 Answer