At the end of every year for three years, RM 1,000 is invested in a account that offers 8% compounded annually. Find the account amount at the end of the three years.
end of first year: 1080
end of second year=2080*1.08
end of third year=(2080*1.08 +1000)1.08
To find the account amount at the end of three years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final account amount
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, the principal amount is RM 1,000, the annual interest rate is 8% (or 0.08 as a decimal), interest is compounded annually (n = 1), and the number of years is 3.
Plugging the values into the formula, we have:
A = 1000(1 + 0.08/1)^(1*3)
A = 1000(1 + 0.08)^3
Calculating the values inside the parentheses first:
A = 1000(1.08)^3
Next, we find the value of (1.08)^3:
A = 1000(1.2597)
Finally, we multiply the principal amount by the value calculated:
A ≈ RM 1,259.70
Therefore, the account amount at the end of three years is approximately RM 1,259.70.
To find the account amount at the end of three years with an annual interest rate of 8% compounded annually, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the account amount at the end of the investment period
P = the principal amount (initial investment)
r = annual interest rate (in decimal form)
n = number of times the interest is compounded per year
t = number of years
In this case, the principal amount is RM 1,000, the annual interest rate is 8% (or 0.08 in decimal form), the interest is compounded annually, and the investment period is three years.
Substituting the values into the formula:
A = 1000(1 + 0.08/1)^(1*3)
A = 1000(1 + 0.08)^3
A = 1000(1.08)^3
A = 1000(1.259712)
A ≈ RM 1259.71
Therefore, the account amount at the end of the three years would be approximately RM 1259.71.