Question

Jerry starts with $1400 in a college savings account. His account earns interest at a rate of 2.7%

compounded annually. How much money is in the account after 7 years?

Answer 1

Answer: There will be $ 1687.02 in the account after 7 years.

Explanation:

Formula to find the accumulated amount (A) in account on principal amount (P) with rate of interest (r) in 't' years is given by :-

`A=P(1+r)^t`

As per given, P = $1400

r= 2.7% = 0.027

t= 7 years

Then,

`A= 1400(1+0.027)^7\\\\= 1400(1.027)^7\\\\= 1400(1.2050168)\\\\= 1400(1.2050168)\approx1687.02`

Hence, there will be $ 1687.02 in the account after 7 years.