Question

Suppose that $6500 is placed in an account that pays 3% interest compounded each year.Assume that no withdrawals are made from the account.Follow the instructions below. Do not do any rounding.

Answer 1

Given

Part A

`\begin{gathered} P=\text{ \$6,500} \\ r=3\text{ \%} \\ t=1 \end{gathered}`

Formula

`A=P(1+(r)/(n))^(nt)`
`\begin{gathered} A=6,500(1+(0.03)/(1))^(1*1) \\ \\ A=6,500(1.03) \\ A=\text{ \$}6,695 \end{gathered}`

Part B

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ \\ P=6500 \\ R=3\text{ \%} \\ t=2 \end{gathered}`
`\begin{gathered} A=6500(1+(0.03)/(1))^(1*2) \\ \\ A=6500(1.03)^2 \\ A=6500(1.0609) \\ A=\text{ \$}6895.85 \end{gathered}`

The final answer