Problema Solution
suppose that 60,000 is invested at 9% interest. find the amount of money in the account after 3 years if the interest is compounded annually.
Answer provided by our tutors
A = ? the future value after 10 year
P = $60,000 is the principal
t = 3 year the number of years
m = 1 the number of compounding periods per year
n = m*t = 3 the number of compounding periods
r = 0.09 or 9% the annual interest rate
i = r/m = 0.09 interest rate per period
A = P(1 + i)^n
A = 60000(1 + 0.09)^3
A = $77,701.74
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there will be $77,701.74 in the account after 3 years.