Question

A bank offers an investment account with an annual interest rate of 1.21% compounded annually. Hong invests $4300 into the account for 2 years.Answer the questions below. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to thelist of financial formulas.Х5?(a) Assuming no withdrawals are made, how much money is in Hong's accountafter 2 years?s[]

Answer 1

Remember that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is the number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

r=1.21%=0.0121

P=$4,300

t=2 years

n=1

substitute in the formula above

`A=4,300(1+(0.0121)/(1))^(1*2)`
`\begin{gathered} A=4,300(1.0121)^2 \\ A=\$4,404.69 \end{gathered}`