or
Cole puts $400.00 into an account to use for school expenses. The account earns 3% interest, compounded annually. How much will be in the account after 4 years?
Use the formula A=P1+
r
n
nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.
Using the given formula, we have:
A = P(1 + r/n)^(n*t)
Where:
P = $400.00 (principal)
r = 3% = 0.03 (interest rate expressed as a decimal)
n = 1 (interest is compounded annually)
t = 4 years
Plugging in the values, we get:
A = 400(1 + 0.03/1)^(1*4)
A = 400(1 + 0.03)^4
A = 400(1.03)^4
A = 400(1.12550875)
A = $450.20
Therefore, there will be $450.20 in the account after 4 years.