Can someone explains this please cuz i dont understand it that well.
What is the final amount in an account after 3years compounded annually with an initial amount of $3,200 and with an annual rate of 0.25%
Remember your formula...
A = P(1 +i)^n
Where P is the principal amount of $3200
interest i is the rate as a decimal number... so .0025
n is the number of times the money is looked at... so annualy means once a year for 3 years. n=
A = 3200x(1 + .0025)^3
....
Thank you!
To calculate the final amount in an account after 3 years compounded annually, we can use the formula:
Final Amount = Initial Amount * (1 + Rate)^Time
In this formula:
- Initial Amount refers to the starting balance in the account, which is $3,200 in this case.
- Rate refers to the annual interest rate expressed as a decimal, which is 0.25% or 0.0025 in this case.
- Time refers to the number of years the money will be compounded for, which is 3 years in this case.
So, plugging the given values into the formula:
Final Amount = $3,200 * (1 + 0.0025)^3
To evaluate the expression inside the parentheses:
(1 + 0.0025)^3 = (1.0025)^3 = 1.0075125
Now we can substitute this value back into the formula:
Final Amount = $3,200 * 1.0075125
Calculating the final amount:
Final Amount = $3,212.04
So, the final amount in the account after 3 years compounded annually with an initial amount of $3,200 and an annual rate of 0.25% is approximately $3,212.04.