Question

Stephen invests in an account that pays 3% compound interest annually. He invests $5,500. He uses the expression P(1+r)t to find the total value of the account. What will be the total value of the account after 6 years?

Answer 1

A = $6567.29

Explanation:

A = P(1+r)^t

Where A = amount in account

P = principal

r = interest rate in decimal form

t= time

We know that P =5500

r = .03

t =6

Substitute these values into the equation.

A = 5500(1+.03)^6

A = 5500(1.03)^6

A = 5500(1.194052297)

A=6567.287631

Since this is money we round to the nearest cent

A = $6567.29