Find the balance in the account: $3,000 principal, earning 3% compounding annually,
after 4 years.
To find the balance in the account after 4 years, we use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (initial deposit or loan amount)
r = annual interest rate (in decimal form)
n = number of times that interest is compounded per year
t = time the money is invested/borrowed for, in years
Given:
P = $3,000
r = 0.03 (3% expressed as a decimal)
n = 1 (compounded annually)
t = 4 years
Plugging in the values into the formula:
A = $3,000(1 + 0.03/1)^(1*4)
A = $3,000(1 + 0.03)^4
A = $3,000(1.03)^4
A = $3,000(1.12554)
A = $3,376.62
So, the balance in the account after 4 years would be $3,376.62.
can you make it simpler
Sure! To find the balance in the account after 4 years with a $3,000 principal earning 3% interest compounded annually, you can simply use the following formula:
Balance = Principal x (1 + interest rate)^number of years
Plugging in the values:
Balance = $3,000 x (1 + 0.03)^4
Balance = $3,000 x (1.03)^4
Balance = $3,000 x 1.12554
Balance = $3,376.62
Therefore, the balance in the account after 4 years would be $3,376.62.