Question

Solve the compound interest problems and round your answer to the nearest 100th.

1) Find the final amount for a $1000 investment at 6% interest compounded annually for 20 years.

Answer 1

$3207.14.

Explanation:

The formula for compound interest is

A = P(1 + r/100)^t where A is the amount after t years, P = Initial investment,

r = interest rate and t = time.

So hear A = 1000(1 + 6/100)^20

= 1000 * 1.06^20

= $3207.14.