Question

4)

I
You deposit $2500 in an account that pays 6 percent annual interest. Find the balance after 3
years if the interest is compounded with the given frequency.

Answer 1

$2,977.54

Explanation:

You are going to use the compound interest formula:

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

P = initial balance

r = interest rate

n = number of times compounded annually

t = time

First, change 6% into the decimal form:

6% ->
`(6)/(100)` -> 0.06

Next, lets plug in the values:

`A=2,500(1+(0.06)/(1) )^(3(1))`

`A=2,977.54`

Your answer will be $2,977.54