Question

Find the total amount in the compound interest account.$1000 is compounded annually at a rate of 9% for 3 years.

Answer 1

Answer: $1, 295.03

Given that

Principal = Amount invested

Rate = percentage interest

T = time

n = compounding period

Apply the compound interest formula

`\begin{gathered} A\text{ = P(1 + }(r)/(n))^{n\text{ x t}} \\ P\text{ = \$1000} \\ r\text{ = 9\%} \\ t\text{ = 3 } \\ n\text{ = 1 because it is compunded annually} \\ A\text{ = 1000( 1 + }(0.09)/(1))^{3\text{ x 1}} \\ A=1000(1+0.09)^3 \\ A=1000(1.09)^3 \\ A\text{ = 1000 x 1.295} \\ A\text{ = \$1, 295. 029} \\ \text{therefore, the total money after three years is \$1, 295.03} \\ \end{gathered}`