Question

If 5000 ivested at a rate of 3% what is the value in 3 years compound interst

Answer 1

$5,463.64

Explanation:

We can apply the formula for accrued value A after n years for a principal P using

`\begin{equation*}% \mbox{\large\( %A = P\left( 1 + (r)/(100)\right)^n%\)} %\end{equation*}`

Here r is the interest rate in percent.. We need to divide by 100 to make it a decimal

Given r = 3%, P = 5000 and n = 3 years

`\begin{equation*}% \mbox{\large\( %A = 5000\left( 1 + (3)/(100)\right)^3%\)} %\end{equation*}`

`\begin{equation*}% \mbox{\large\( %A = 5000\left( 1 + .03}\right)^3%\)} %\end{equation*}`'

`\begin{equation*}% \mbox{\large\( %A = 5000\left( 1.03}\right)^3%\)} %\end{equation*}`

`\begin{equation*}% \mbox{\large\( %A = \$5,463.64%\)} %\end{equation*}`

So value in 3 years = $5,463.64