Question

Finding the final amount in a word problem on compound interest

Answer 1

Remember that the formula to calculate the total amount in an account with compoud interest is:

`P(1+r)^n`

Where:

• P, is the principal (amount incially invested)

,

• r ,is the rate of interest

,

• n, is the times that the interest is compounded

Using this and the data given we'll get:

`2000(1+(4.8)/(100))^9=3049.87`

Thereby, we can conclude that the accounts balance after 9 years is $3,049.87