Problema Solution
Find the accumulated amount A if the principal P = $2,000 is invested at the interest rate of r = 6% per year for t = 6 years, compounded annually
Answer provided by our tutors
P = $2,000 is the principal
t = 6 years
r = 0.06 or 6% the annual interest rate
m = 1 is the number of compounding periods per year
n = m*t = 1*6 = 6 is the number of compounding periods
i = r/m = 0.06 is the interest rate per period
A = accumulated amount
A = P(1 + i)^n
A = 2000(1 + 0.06)^6
calculating we find
A = $2,837.04
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