Question

3. How much money do I have from saving $700 at 6% interest for 20 years if the interest is compounded annually?

Answer 1

First we have to use the formula for compound interest

`A=P(1+i)^(nt)`

In this case P would be $700

interest would be 6/100

and nt is equal to 20

Replacing these values into the equation we obtain

A= $2244.99 rounded would be $2245.