Find the final amount of money in an account if $2,600 is deposited at 4% interest compounded annually and the money is left for 7 years.
Find the future value if $11,000.00 is invested for 5 years at 10% compounded annual.
Could you help me on this question!
To find the final amount of money in the account, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A = the final amount of money in the account
P = the principal amount (initial deposit) = $2,600
r = annual interest rate (as a decimal) = 4% = 0.04
n = number of times interest is compounded per year
t = number of years
Since the interest is compounded annually, n = 1, and t = 7. Plugging in these values into the formula, we get:
A = 2,600(1 + 0.04/1)^(1*7)
Simplifying further:
A = 2,600(1 + 0.04)^7
A = 2,600(1.04)^7
A ≈ $3,401.67
Therefore, the final amount of money in the account after 7 years would be approximately $3,401.67.
To find the final amount of money in an account with compound interest, you can use the formula:
A = P(1 + r/n)^(nt)
Where:
A is the final amount of money,
P is the initial principal (deposit),
r is the annual interest rate (expressed as a decimal),
n is the number of times the interest is compounded per year, and
t is the number of years.
Let's apply this formula to your question:
Given:
P = $2,600 (initial deposit)
r = 4% = 0.04 (written as a decimal)
n = 1 (compounded annually)
t = 7 years
A = 2,600(1 + 0.04/1)^(1*7)
A = 2,600(1 + 0.04)^7
A = 2,600(1.04)^7
A ≈ 2,600(1.311) [Rounding to three decimal places]
A ≈ $3,402.60
Therefore, the final amount of money in the account after 7 years would be approximately $3,402.60.
P = Po(1+r)^n,
Po = $2600,
r = 0.04/yr.
n = 1comp./yr. * 7yrs. = 7 Compounding periods.
P = 2600(1.04^7) =