Question

Emilio puts $4,000.00 into an account to use for school expenses. The account earns 15% interest, compounded annually. How much will be in the account after 6 years?

Round your answer to the nearest cent.

Answer 1

We can use the formula for compound interest to find the amount in the account after 6 years:

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

where:
A = the amount of money in the account after t years
P = the initial principal (or starting amount), which is $4,000.00 in this case
r = the annual interest rate as a decimal, which is 0.15 (since the interest rate is 15%)
n = the number of times the interest is compounded per year, which is 1 since the interest is compounded annually
t = the number of years, which is 6 in this case

Plugging in the values, we get:

A = 4000(1 + 0.15/1)^(1*6)
A = 4000(1.15)^6
A ≈ $9,432.44

Therefore, the amount in the account after 6 years is approximately $9,432.44.

Answer 2

$10,359.73.

Explanation:

We can use the formula for compound interest:

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

where:

A = the amount of money after the specified time

P = the principal amount (the initial amount of money)

r = the annual interest rate (as a decimal)

n = the number of times the interest is compounded per year

t = the time (in years)

In this case, we have:

P = $4,000.00

r = 15% = 0.15

n = 1 (compounded annually)

t = 6 years

Substituting into the formula, we get:

A = 4000(1 + 0.15/1)^(1*6)

A = 4000(1.15)^6

A ≈ $10,359.73

Therefore, the amount in the account after 6 years, rounded to the nearest cent, is $10,359.73.