Final answer:
To find out how much money will be in the account after 4 years, the compound interest formula A = P(1 + r/n)^(nt) is used. For a $250 deposit and a 2.2% annual interest rate, the amount after 4 years is approximately $273.47.
Step-by-step explanation:
Calculating Compound Interest
An account with a deposit of $250 with an annual interest rate of 2.2%, and calculating its value after 4 years, involves the mathematical concept of compound interest. Using the formula for compound interest A = P(1 + r/n)nt, where:
- P is the principal amount ($250)
- r is the annual interest rate (0.022)
- n is the number of times interest is compounded per year (1, since it's annual)
- t is the time the money is invested for in years (4)
Substituting into the formula, we get:
A = 250(1 + 0.022/1)1*4 which simplifies to A = 250(1.022)4. After performing the calculations, the amount in the account after 4 years is approximately $273.47.