Question

Find the balance in the account after the given period.

$4000 principal earning 7% compounded annually, 8 years

Answer 1

The balance in the account after the given period is
`\$6,872.74`

we know that

The compound interest formula is equal to

`\text{A}=\text{P}(1+\frac{\text{r}}{\text{n}})^{\text{nt}}`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`\text{t}= 8 \ \text{years}`

`\text{P}=\$4,000`

`\text{r}=0.07`

`\text{n}=1`

substitute in the formula above

`\text{A}=\$4,000(1+(0.07)/(1))^(1*8)=\$6,872.74`