An investor puts $700 in an account that pays 2% interest compounded annually. Find the account balance after 8 years.
amount = pricipal(1 + i)^n
for your case i = .02
take over
Can you just show me the formula I can figure out the rest.
OK thank you!
THATS WRONG
To find the account balance after 8 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future account balance
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case:
P = $700
r = 2% = 0.02 (as a decimal)
n = 1 (compounded annually)
t = 8 years
Plug the values into the formula:
A = 700(1 + 0.02/1)^(1*8)
A = 700(1 + 0.02)^8
A = 700(1.02)^8
Now calculate the future account balance using a calculator or software:
A ≈ $786.44
Therefore, the account balance after 8 years will be approximately $786.44.