Question

Desmond opened a savings account and deposited $1,000.00 as principal. The account earns

1% interest, compounded annually. What is the balance after 3 years?
= P(1 + 2)^^₁ \ where A is the balance (final amount), P is the principal
Use the formula A =
(starting amount), r is the interest rate expressed as a decimal, n is the number of times per
year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.

Answer 1

The answer is $1,030.30

Answer 2

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$1000\\ r=rate\to 1\%\to (1)/(100)\dotfill &0.01\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &3 \end{cases} \\\\\\ A = 1000\left(1+(0.01)/(1)\right)^(1\cdot 3)\implies A=1000(1.01)^3 \implies A \approx 1030.30`