Question

$1,700 is deposited in an account that pays 6.5% annual interest, compounded annually. What is the balance after 3 years?

Answer 1

Answer: $2053.51

Explanation:

The formula for compound interest is
`A=P(1+(r)/(n) )^(nt)`

Where

A = final amount

P = initial principal balance (1700 for this)

r = interest rate (0.065 for this)

n = number of times interest applied per time period (1 for this)

t = number of time periods elapsed (3 for this)

`A=1700(1+(0.065)/(1))^((3)(1)) \\A=1700(1.065})^(3) \\A=2053.51435`

Rounded that is 2053.51