To calculate the balance in an account after a certain period of time with a principal amount (P), an interest rate (r), and compounding annually (t), you can use the formula for compound interest:
\[ A = P(1 + r)^t \]
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 (decimal).
- \( t \) is the number of years the money is invested or borrowed.
Given:
- Principal \( P = 3400 \)
- Annual interest rate \( r = 3.6% = 0.036 \)
- Time \( t = 2 \) years
Plugging in the values:
\[ A = 3400(1 + 0.036)^2 \] \[ A = 3400(1.036)^2 \] \[ A = 3400(1.073296) \] \[ A \approx 3649.20 \]
Thus, after 2 years, the balance in the account will be approximately $3,649.20.
Among the given options, the closest amount is $3,649.21.
4 answers