Question

Bryan invests $500 in an account earning 4% interest that compounds annually. If hemakes no additional deposits or withdrawals, how much will be in the account:1. After 10 years?

Answer 1

Using the compound interest formula:

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ _{\text{ }} \\ _{} \end{gathered}`

Where:

P = Principal = 500

r = interest rate = 4% = 0.04

n = Number of times interest is compounded per year = 1

t = time = 10

so:

`\begin{gathered} A=500(1+(0.04)/(1))^(10\cdot1) \\ A\approx740.12 \end{gathered}`

Answer:

$740.12