Question

If I deposit $ 800 in a savings account at 6% interest compounded annually, and if I make no withdrawals or deposits for 4 years, how much will I have in my account at the end of 4 years?

Answer 1

$992.00

Explanation:

Where:

I = P x r x t

P is the principal amount, $800.00.

r is the interest rate, 6% per year, or in decimal form, 6/100=0.06.

t is the time involved, 4....year(s) time periods.

So, t is 4....year time periods.

To find the simple interest, we multiply 800 × 0.06 × 4 to get that:

The interest is: $192.00

Usually, now, the interest is added onto the principal to figure some new amount after 4 year(s),

or 800.00 + 192.00 = 992.00. For example:

If you borrowed the $800.00, you would now owe $992.00

If you loaned someone $800.00, you would now be due $992.00

If owned something, like a $800.00 bond, it would be worth $992.00 now.