Question

Teresa deposits $3,500 in an account that earns

Answer 1

The total amount accrued, principal plus interest, with compound interest on a principal of $3,500.00 at a rate of 2.25%  is $4,779.19.

Compound Interest

Given Data

• Principal P= $3,500

• Rate r = 2.25%

• Time t = 14 years

• Final Amount A = ??

A = P + I where

P (principal) = $3,500.00

I (interest) = $1,279.19

Calculation Steps:

First, convert R as a percent to r as a decimal

r = R/100

r = 2.25/100

r = 0.0225 rate per year,

Then solve the equation for A

A = P(1 + r/n)^nt

A = 3,500.00(1 + 0.0225/1)^(1)(14)

A = 3,500.00(1 + 0.0225)^(14)

A = $4,779.19

Learn more about compound interest here:

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