Question

Arlo invested $4000 in an account that earns 5.5% interest compounded annually the formula for compound interest interest is A (t)=P(1+l). How much did arlo have in the account after 4 years

Answer 1

Answer: 4,955.30

Explanation:

Answer 2

For compounding interests, we use the equation F = P (1+i)^n where F is the future amount of the principal amount, P, in n years. Take note that the interest to be used should be the effective interest rate. In this case, it is already the effective interest rate.

F = P (1+i)^n
F = $4000 (1+.055)^4
F = $4955.2986