Question

You have $1000 invested for 3 years and get 10% interest.

Answer 1

$1331 compounded annually after three years

Explanation:

Given the following question:

1000 dollars invested (princpal)....
You invest that 1000 dollars for three years (time)....

Assuming it's compounded annually we need to substitute the values into the formula to calculate compound interest.


`A=P(1+(r)/(n) )^(nt)`

`P=1000`

`(r)/(n) =(10)/(100) =10/100=0.1`

`nt=(1)(3)`

`A=1000(1+0.1)^((1)(3))`

`1*3=3`

`A=1000(1+0.1)^(3)`

`1+0.1=1.1`

`1.1^3=1.1*1.1*1.1=1.331`

`A=1000*1.331`

`1000*1.331=1331`

`=1331`

Which means after a intital investment of 1000 dollars you will have "1331 dollars" after three years compounded annually.

Hope this helps.