suppose you deposit $3000 in a savings account that pays interest in a a rate of 4%. if no money is added or withdrawn from the account, how much will be in the account after ten years.
The answer is C
$4440.73
These were the multiple choice answers given to me for this problem which don't seem to make sense because I keep getting $4200
A. $3122.18
B. $4994.50
C. $4440.73
D. $86776.40
the required answer is:
\$4440.73
Recall the formula of the Compound Interest:
A=P\left(1+\frac{r}{n}\right)^{nt}
To calculate the amount in the savings account after ten years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Final amount in the account
P = Principal amount (initial deposit)
r = Annual interest rate (as a decimal)
n = Number of times interest is compounded per year
t = Number of years
In this case, the principal amount (P) is $3000, the annual interest rate (r) is 4% (or 0.04 as a decimal), and the interest is compounded annually (n = 1) since no mention of compounding frequency is provided. The number of years (t) is 10.
Plugging in these values, the formula becomes:
A = 3000(1 + 0.04/1)^(1*10)
A = 3000(1 + 0.04)^10
Now, we can calculate the amount in the account after ten years:
A = 3000(1.04)^10
A ≈ $3000(1.488)
A ≈ $4464
Therefore, after ten years, the amount in the savings account will be approximately $4464.
I = PRT
I = 3,000 * 0.04 * 10
I = 1,200
1,200 + 3,000 = ?