Question

How much would $400 be worth after 6 years, if it were invested at 2%interest compounded annually? (Use the formula below and round youranswer to the nearest cent.)

Answer 1

The formula to use is

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

From the question, we have

`\begin{gathered} P=\text{ \$}400 \\ \\ t=6\text{ }years \\ \\ r=2\text{ \%} \\ \\ r=0.02 \\ \\ n=1 \end{gathered}`

Using the parameters, we have

`\begin{gathered} A(t)=P(1+(r)/(n))^(nt) \\ \\ A(t)=400(1+(0.02)/(1))^6 \\ \\ A(t)=400(1.02)^6 \\ \\ A(t)=\text{ \$}450.46 \end{gathered}`

The answer is