Final answer:
To find the ending balance, apply the compound interest formula A = P(1 + r/n)^(nt) with values P=$1000, r=3.2%, n=1, and t=4. After calculating, the final balance is approximately $1132.31.
Step-by-step explanation:
To find the balance of $1000 compounded annually at a rate of 3.2% for 4 years, we can use the compound interest formula:
A = P(1 + r/n)nt
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.
- t is the time the money is invested for, in years.
In this case:
- P = $1000
- r = 0.032 (3.2% as a decimal)
- n = 1 (since it's compounded annually)
- t = 4 years
Plugging these values into the formula, we get:
A = $1000(1 + 0.032/1)1×4
A = $1000(1 + 0.032)4
A = $1000(1.032)4
Calculating the value:
A = $1000 × 1.0324
A = $1000 × 1.13230816
A = $1132.31
Therefore, the balance after 4 years would be approximately $1132.31.