Question

Determine how much is in the account on the basis of the indicated compounding after the specified years have passed; P is the initial principal, and r is the annual rate given as a percent. (Round your answer to the nearest cent.) P = $4500, r = 2.6%, compounded annually for 1 year.

Answer 1

Using the formula for compound interest, A = P(1 + r)^n, the account with an initial principal of $4,500 and an annual interest rate of 2.6%, compounded annually for 1 year, would have $4,617.00 after one year when rounded to the nearest cent.

Step-by-step explanation:

To calculate how much is in the account after one year with compound interest, you can use the formula:
A = P(1 + r)n

Where:
A is the amount of money accumulated after n years, including interest.
P is the principal amount (the initial amount of money).
r is the annual interest rate (decimal).
n is the number of times that interest is compounded per year.

Given:
P = $4,500
r = 2.6% or 0.026 (as a decimal)
n = 1 (since it's compounded annually for 1 year),

we plug these into the formula:

A = $4,500(1 + 0.026)1 = $4,500(1.026) = $4,617.00

After one year, the account would have $4,617.00, rounded to the nearest cent.