Question

find the balance in the account after the given period. $3000 principal earning 5% compounded annually, 4 years

Answer 1

Given:

Principal= $3000

Rate of interest = 5%

Time = 4 years

n = 1 (compounded annually)

To find:

The balance in the account after 4 years

Solution:

Compound interest formula:

`$A=P\left(1+(r)/(n)\right)^(n t)`

Substitute the given values.

`$A=3000\left(1+(5\%)/(1)\right)^(1* 4)`

`$A=3000\left(1+5\%\right)^( 4)`

To convert percentage into fraction divide by 100.

`$A=3000\left(1+(5)/(100) \right)^( 4)`

`$A=3000\left(1+0.05 \right)^( 4)`

`$A=3000\left(1.05 \right)^( 4)`

`$A=3464.5`

The balance in the account after 4 years is $3464.5.