Find the balance in the account.
$800 principal earning 7%, compounded annually, after 4 years
$1,920,800.00
$1,024.00
$1,048.64
$3,424.00
To find the balance in the account after 4 years, we need to use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the balance after time t
P = the principal amount
r = the annual interest rate (expressed as a decimal)
n = the number of times the interest is compounded per year
t = the number of years
In this case, the principal amount is $800, the annual interest rate is 7% or 0.07 (expressed as a decimal), the interest is compounded annually (n = 1), and the time is 4 years.
Plugging these values into the formula:
A = 800(1 + 0.07/1)^(1*4)
A = 800(1 + 0.07)^4
A = 800(1.07)^4
A = 800(1.310796)
A = $1,048.64
Therefore, the balance in the account after 4 years will be $1,048.64.