FIND THE COMPOUND INTEREST OF 1400 IN 4YEARS AT 3% PER ANNUM
To find the compound interest of an amount, we need to use the formula:
A = P(1+r/n)^(nt)
Where:
A = the future value or the total amount after interest
P = the principal amount (the initial amount)
r = the annual interest rate (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years
In this case, the principal amount (P) is $1400, the annual interest rate (r) is 3% or 0.03, and the number of years (t) is 4. The frequency of compounding (n) is not mentioned in the question, so we'll assume it is compounded annually.
Using the formula, we can calculate the compound interest as follows:
A = 1400(1 + 0.03/1)^(1*4)
A = 1400(1.03)^4
A = 1400(1.1255)
A ≈ $1575.70
To find the compound interest, we subtract the principal amount from the total amount:
Compound Interest = A - P
Compound Interest = $1575.70 - $1400
Compound Interest ≈ $175.70
Therefore, the compound interest on $1400 in 4 years at an annual interest rate of 3% is approximately $175.70.