Question

if $3,000 is invested in a bank account at an interest rate of 6 percent per year find the amount in the bank after 10 years if interest is compounded annually

Answer 1

We have the following:

`A(t)=P(1+r)^t`

replacing:

A is the amount

P is the principal 3000

r is the interest rate (decimal), 0.06

t is the time, 10 years

`\begin{gathered} A(10)=3000\cdot(1+0.06)^(10) \\ A(10)=3000\cdot(1.06)^(10) \\ A(10)=5372.54 \end{gathered}`

Therefore the amount is $5372.54