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Calculate the compound interest. How much would $400 invested at 5% interest compounded annually be worth after 6 years? Formulas: Compound Interest: A(t) = P(1+r/n)^nt Continuously Compound Interest:
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Calculate the compound interest.

How much would $400
invested at 5% interest
compounded annually be
worth after 6 years?

Formulas:

Compound Interest: A(t) = P(1+r/n)^nt

Continuously Compound Interest: A(t) = P•e^rt

User Antweiss
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1 Answer

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You use the first formula. You plug in the values to get A=400(1+(0.05/1))^6. You should get approximately $536.04. I used 0.05 because you need to change the percent to a decimal, and 1 for n because it is compounded annually, meaning once a year.
User Aaron Silverman
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