math(urgent)

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

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asked by fizz
  1. 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

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    posted by Steve
  2. Just use the formula.
    Amount = payment( (1+i)^n -1)/i

    Amount = 1000(1.08)^3 -1)/.08
    = 3246.40

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    posted by Reiny
  3. ok thanks both of you

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    posted by fizz

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