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PLEASE HELP MEEE!! NEED HELP FAST!! 20 POINTS

the current balance in Marianne's saving account is $525. The account pays 3.5% compounded annually. If she makes no deposits or withdrawals for the next 4 years,her savings account balance will be-

Please explain with the correct interest formula.

User Strmstn
by
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2 Answers

3 votes

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User Ashish Jagtap
by
5.5k points
3 votes

Answer: 602.45 dollars

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Step-by-step explanation:

The formula we'll use is

A = P(1+r/n)^(n*t)

which is the compound interest formula

The variables are

  • P = amount deposited (principal) = 525
  • r = interest rate in decimal form = 0.035
  • n = compounding frequency = 1 (annually means 1 time a year)
  • t = number of years = 4

So we get

A = P(1+r/n)^(n*t)

A = 525(1+0.035/1)^(1*4)

A = 602.449575328124

A = 602.45

Which is her balance after four years assuming no additional deposits or withdrawals.

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Extra info:

Subtract off the initial balance to get 602.45 - 525 = 77.45

She made 77.45 dollars in interest over those four years.

User Hiveer
by
5.8k points
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