How do I solve this
An investment account earns 4% per year compounded annually. If the initial investment was $4,000.00, how much is in the account after 3 years? Round your answer to the nearest dollar.
To solve this problem, we can use the formula for compound interest:
A = P(1 + r)^n
Where:
A = the amount of money in the account after n years
P = the initial investment amount ($4,000.00)
r = the annual interest rate (4% or 0.04)
n = the number of years (3)
Plugging in the values:
A = $4,000.00(1 + 0.04)^3
A = $4,000.00(1.04)^3
A = $4,000.00(1.124864)
A = $4,499.46
Therefore, after 3 years the amount in the account will be approximately $4,499.46 when rounded to the nearest dollar.