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Actually calculate the final amount on $1000 compounded annually at 6% per year for 4 years.

  • math -

    $1,000 * 0.06 = $60.00
    $1,000 + 60 = 1,060 >> end of year 1

    $1,060 * 0.06 = $63.60
    $1,060 + 63.60 = $1,123.60 >> end of year 2

    You get the idea, and I'm sure can figure out the rest.

    We'll be glad to check your answer.

  • math -

    or
    $1,000 * 1.06 * 1.06 * 1.06 * 1.06

    = $1,000 * 1.06^4

    = $1,262.48

    =

  • math -

    Thanks, Damon. I thought there was an easier way of doing this problem, but I didn't know what! I sure learn a lot on this board.

  • math -

    :) I assumed that you were explaining step by step.

  • math -

    1262.47

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