Question

A savings account has $24,750 in it, earning 1.25% interest, compounded annually for 3 years. How much will be in the account after that time?

[Formulas are,
[I = P, R, T]
[A = P + I]
[A = P(1 + R times T)

Answer 1

$25,689.77

Explanation:

`AV=PV(1+i)^n\\AV=24750(1+.0125)^3\\25689.77`

Answer 2

$25,689.775

Explanation:

The interest has to be in decimal form. So 1.25/100=0.0125

Plug everything into the equation for compound equation
`A=P(1+(r)/(t))^(n)^(t)`

Which is A = 24750 [(1 + 0.0125/1)^(1)(3)]

Type them in a calculator and get A ≈ $25,689.775

***the question says "compounded annually" so the equation for compound interest
`A=P(1+(r)/(t))^(n)^(t)` should be used. Your provided formula of A = P(1 + R times T) shouldn't be used here, it is for simple interest but not compound.*** (^_^)