Question

Corey invested $1500 when he was a freshman in order to save for college. If he chooses to invest it in an account that earns 3.5% interest and is compounded annually, how much money will he have after 4 years?

Answer 1

Corey will have approximately $1627.41 after 4 years.

Step-by-step explanation:

To calculate the amount of money Corey will have after 4 years, we can use the compound interest formula:

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

Where:

• A is the final amount
• P is the initial principal (or investment)
• r is the annual interest rate (as a decimal)
• n is the number of times the interest is compounded per year
• t is the number of years

In this case, Corey invested $1500 with an interest rate of 3.5% compounded annually, so the formula becomes:

A = 1500(1 + 0.035/1)^(1*4)

Simplifying this equation, Corey will have approximately $1627.41 after 4 years.

Answer 2

Answer: He will have $1721.28. after 4 years.

Step-by-step explanation:

The formula we use to find the compounded amount A is :

`A=P(1+r)^t`, where P= principal value, r = rate of interest , t= time.

As per given , we have

P=$1500 , r=3.5%=0.035 , t= 4 years

Money he will have after 4 years =
`1500(1+0.035)^4`

`=1500(1.035)^4\\\\=1721.28450094\approx1721.28`

Hence, he will have $1721.28. after 4 years.