Question

Suppose that$ 7000 is placed in an account that pays 6% interest compounded each year.

Assume that no withdrawals are made from the account.
Follow the instructions below. Do not do any rounding.

Answer 1

1) 7420

2) 7865.5

Explanation:

The Formula for Compound Intertst is Amout(rate/100+1)^number of years

7000(.06+1)^1

7000(.06+1)^2