Question

Jeff invested $3000 in an account that earns 6.5% interest, compounded annually. The formula for compound interest is A(t) = P(1 + i) t. How much did Jeff have in the account after 3 years?

Answer 1

$3623.85

General Formulas and Concepts:

Pre-Algebra

Order of Operations: BPEMDAS

1. Brackets
2. Parenthesis
3. Exponents
4. Multiplication
5. Division
6. Addition
7. Subtraction

• Left to Right

Equality Properties

Algebra I

Compounded Interest Formula:
`A=P(1 + (r)/(n) )^(nt)`

• A is final amount
• P is principle amount
• r is rate
• n is compounded rate
• t is time in years

Explanation:

Step 1: Identify Variables

P = 3000

r = 0.065

n = 1

t = 3

Step 2: Find Final Amount A

1. Substitute [CIF]:
   `A=3000(1 + (0.065)/(1) )^(1(3))`
2. Multiply:
   `A=3000(1 + (0.065)/(1) )^(3)`
3. Divide:
   `A=3000(1 +0.065 )^(3)`
4. Add:
   `A=3000(1.065 )^(3)`
5. Exponents:
   `A=3000(1.20795)`
6. Multiply:
   `A=3623.85`