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A $6,300.00 principal earns 6% interest, compounded annually. After 3 years, what is the balance in the account?

User Krystel
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2 Answers

7 votes
Hello,

To find this answer, you have to start with 6,300 and multiply it by 1.06 three times. We are using 1.06 because we are adding 6% (0.06) onto the total 3 times.

6300 x 1.06 x 1.06 x 1.06 = $7,503.40
OR
6300(1.06)^3 = $7,503.40

The second equation is written as a compound interest equation. You just need to switch the 3 if you want to find the total for a different amount of years.

I hope this helps, Good luck!
User Pooyan Khosravi
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2 votes
7,503

Hope this helped!
User SQVe
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7.1k points