Problema Solution
Person A deposits $2800 in an account that pays 9% interest compounded once a year.In their account after one year? How much more?
Answer provided by our tutors
I am assuming you need to find the feature value and the interest.
Let
P = $2800 the principle (the investment)
i = 9% or 0.09 the annual rate as a decimal
t = 1 years
A = the future value
I = the interest
The formula for the future value is:
A = P(1 + i)^t
Plug the values into the formula:
A = 2800(1 + 0.09)^1
........
click here to see the step by step calculation for A
........
A = $3052
I = A - P
I = 3052 - 2800
I = $252
After 1 year there will be $3052 on the account, $232 more than the deposit.