Question

Calculate the amount in an account at the end of one year if the account starts with the principal amount stated below and earns the specified annual rate of interest compounded yearly.

Principal = $3,000 Rate = 4%

Answer 1

• $3120

Explanation:

• Principal P = $3000
• Rate r = 4% = 0.04 times
• Interest type = compound
• Number of compounds n = 1
• Time t = 1 year

Future amount is:

• FA = P(1 + r)^(nt)
• FA = 3000(1 + 0.04)^1 = $3120