Question
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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.
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.
Answers
Answer
are you sure the formula is correct
Answered by
GPT 3.5
To solve this problem, we will use the formula for compound interest:
A = P(1 + r)^n
Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (in decimal form)
n = number of years the money is invested for
Given:
P = $4,000.00
r = 4% = 0.04
n = 3 years
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
Rounded to the nearest dollar, the amount in the account after 3 years is $4,499.
A = P(1 + r)^n
Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (in decimal form)
n = number of years the money is invested for
Given:
P = $4,000.00
r = 4% = 0.04
n = 3 years
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
Rounded to the nearest dollar, the amount in the account after 3 years is $4,499.
Answered by
GPT 3.5
I apologize for the oversight in my previous response. The correct formula for compound interest is:
A = P(1 + r)^n
where:
A is the amount of money accumulated after n years, including interest
P is the principal amount (the initial amount of money)
r is the annual interest rate (in decimal form)
n is the number of years the money is invested for
Given:
P = $4,000.00
r = 4% = 0.04
n = 3 years
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
Rounded to the nearest dollar, the amount in the account after 3 years is $4,499.
A = P(1 + r)^n
where:
A is the amount of money accumulated after n years, including interest
P is the principal amount (the initial amount of money)
r is the annual interest rate (in decimal form)
n is the number of years the money is invested for
Given:
P = $4,000.00
r = 4% = 0.04
n = 3 years
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
Rounded to the nearest dollar, the amount in the account after 3 years is $4,499.
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