Question

Sean puts $600.00 into an account to use for school expenses. The account earns 8%

interest, compounded annually. How much will be in the account after 8 years?
nt
Use the formula A = P 1 + , where A is the balance (final amount), P is the principal
n
(starting amount), r is the interest rate expressed as a decimal, n is the number of times per
year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.

Answer 1

`A=\$1,110.56}`

Explanation:

we know that

The compound interest formula is equal to

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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=8\ years\\ P=\$600.00\\ r=8\%=8/100=0.08\\n=1`

substitute in the formula above

`A=600(1+(0.08)/(1))^(1*8)`

`A=600(1.08)^(8)`

`A=\$1,110.56}`