Question

$800 is deposited in an account

that pays 9% annual interest,
compounded annually. Find the
balance after four years.
$[ ? ]

Answer 1

$1,129.27

Explanation:

Compounded interest formula is

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

Where
`A` is the final amount,
`P` is the principal,
`r` is the anual interest in decimal,
`n` is the numer of compounded periods in one year and
`t` is the time in years.

`P= 800\\r= 0.09\\n= 1\\t= 4`

So then we plug our numbers...

`A=800(1+(0.09)/(1))^(1(4))=800(1.09)^(4)`

`A=$1,129.27`

After 4 years the amount would be $1,129.27