Problema Solution
A principal of $5,350 is placed in an account that earns 3.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 4 years?
Answer provided by our tutors
P = $5,350
i = 0.035 or 3.5% interest rate per period (annually)
n = 4*1 = 4 the number of compounding periods
A = the compound amount
A = P(1 + i)^n
A = 5350(1 + 0.035)^4
by solving we find
A = $6,139.25
click here to see the step by step calculation for A
at the end of 4 years there will be $6,139.25 in the account.