Use the compound interest formula to compute the total amount accumulated and the interest earned.

Question

​$3000 for 3 years at ​4.0% compounded

Answer 1

annually.

The compound interest formula is:

A = P(1 + r/n)^(nt)

Where:
A = total amount accumulated
P = principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = time (in years)

In this case, we have:

P = $3000
r = 0.04 (4.0% expressed as a decimal)
n = 1 (compounded annually)
t = 3 years

So we can plug these values into the formula:

A = 3000(1 + 0.04/1)^(1*3)
A = 3000(1.04)^3
A = 3000(1.124864)
A = $3,374.59

The total amount accumulated after 3 years is $3,374.59.

To calculate the interest earned, we just subtract the initial investment from the total amount accumulated:

I = A - P
I = $3,374.59 - $3000
I = $374.59

So the interest earned is $374.59.