Cassandra bought an antique dresser for $500. If the value of her dresser increase 6% annually, what will be the value od Cassandra's dresser at the end of 3 years to the nearest dollar?
To find the value of Cassandra's dresser at the end of 3 years, we will calculate the annual increase and add it to the original value.
Step 1: Calculate the annual increase:
The value of the dresser increases by 6% annually.
Annual increase = (6/100) * $500
Annual increase = $30
Step 2: Calculate the total increase at the end of 3 years:
Total increase = Annual increase * Number of years
Total increase = $30 * 3
Total increase = $90
Step 3: Calculate the final value of the dresser:
Final value = Original value + Total increase
Final value = $500 + $90
Final value = $590
Therefore, the value of Cassandra's dresser at the end of 3 years will be approximately $590.
To find the value of Cassandra's dresser at the end of 3 years, we need to calculate the compound interest.
Compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/asset
P = the initial amount/investment/asset value
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
From the given information:
P = $500 (initial value)
r = 6% or 0.06 (annual interest rate in decimal form)
n = 1 (interest is compounded annually)
t = 3 (number of years)
Plugging these values into the compound interest formula:
A = 500(1 + 0.06/1)^(1*3)
A = 500(1 + 0.06)^3
A = 500(1.06)^3
A ≈ 500(1.191016)
A ≈ $595.51
Therefore, the value of Cassandra's dresser at the end of 3 years, to the nearest dollar, will be approximately $595.
500 * 1.06 = 530 >> end of year 1
530 * 1.06 = 562 >> end of year 2
??? >> end of year 3