Question

Christine deposited $4000 into an account with %3.7 interest, compounded annually. Assuming that no withdrawals are made, how much will she have in the account after 6 years?

Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

$4,974.31

Explanation:

First, convert R as a percent to r as a decimal

r = R/100

r = 3.7/100

r = 0.037 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 4,000.00(1 + 0.037/1)(1)(6)

A = 4,000.00(1 + 0.037)(6)

A = $4,974.31

Summary:

The total amount accrued, principal plus interest, with compound interest on a principal of $4,000.00 at a rate of 3.7% per year compounded 1 times per year over 6 years is $4,974.31.