At the end of every year for 3 years, RM1000 will be invested in an account that offers 8% compounded annualy.Find the account amount at the end of the 3 years.
the answer is $ 3246.40
in my calculation i solve
1000(1+o.08/1)^(3-1)
=11664
what you have done is calculate the first year's growth.
Now you have to add the 2nd year:
1000(1+.08)^(2-1) = 1080.00
Then the third year: 1000
1166.40+1080.00+1000.00 = 3246.40
As you can see, for n years, you would have
1000(1+1.08+1.08^2 + ... + 1.08^(n-1))
= 1000(1.08^n - 1)/(1.08-1)
which for n=3, is
1000(1.08^3 - 1)/(1.08-1) = 3246.40
Just use the formula.
Amount = payment( (1+i)^n -1)/i
Amount = 1000(1.08)^3 -1)/.08
= 3246.40
ok thanks both of you
To calculate the account amount at the end of 3 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = final account amount
P = initial principal or investment amount
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, each year RM1000 is invested, so our principal (P) is RM1000. The interest rate (r) is 8% or 0.08, and it is compounded annually (n = 1). We want to calculate the account amount at the end of 3 years, so t = 3.
Using the formula, the calculation becomes:
A = 1000(1 + 0.08/1)^(1*3)
= 1000(1 + 0.08)^3
= 1000(1.08)^3
= 1000(1.259712)
Evaluating this expression, we get:
A ≈ RM1259.71
Therefore, the account amount at the end of 3 years is approximately RM1259.71, not RM3246.40. It seems there may be an error in your calculations.