Question

A bank account principal is $1,000 and accumulates yearly interest at 9%. Assuming that no withdrawals are made, use the compound interest formula to compute the amount in the account after 6 years.

Answer 1

$1677.10

Step-by-step explanation:

We'll use the below compound interest formula to solve the given question;

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

where A = the final amount = ?

P = the principal amount = $1000

r = interest rate in decimal = 9% = 9/100 = 0.09

r = number of times interest is compounded per time = 1

t = number of time period = 6 years

Let's substitute the above values into our formula and solve for A;

`\begin{gathered} A=1000(1+(0.09)/(1))^(1*6) \\ A=1000(1.09)^6 \\ A=1677.10 \end{gathered}`