Question

Sari opened a savings account with $150.00. The account earns interest at a rate of 6% compounded annually. If Sari makes no additional deposits or withdrawals, what will her account balance at the end of year 6 equal?

Answer 1

To calculate the account balance at the end of year 6, use the formula A = P(1 + r/n)^(nt). In this case, Sari's account balance will be $203.67.

Step-by-step explanation:

To calculate the account balance at the end of year 6, we can use the formula:

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

Where A is the account balance, P is the principal amount, r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, P = $150.00, r = 6%, n = 1, and t = 6. Plugging in these values into the formula gives:

A = $150.00(1 + 0.06/1)^(1*6) = $203.67

Therefore, Sari's account balance at the end of year 6 will be $203.67.