(a) Using the formula for compound interest:
A = P(1 + r/n)^(nt)
where A is the final amount, P is the initial investment, r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years.
Plugging in the given values:
A = 3600(1 + 0.0131/1)^(1*3) = $3,809.03
Therefore, Hans has $3,809.03 in his account after 3 years.
(b) To find the amount of interest earned, we subtract the initial investment from the final amount:
Interest = A - P = $3,809.03 - $3,600 = $209.03
Therefore, Hans earned $209.03 in interest over 3 years.
A bank offers an investment account with an annual interest rate of
1.31%
compounded annually. Hans invests
$3600
into the account for
3
years.
Answer the questions below. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the
list of financial formulas
.
(a) Assuming no withdrawals are made, how much money is in Hans' account after
3
years?
$
(b) How much interest is earned on Hans' investment after
3
years?
1 answer
4 answers