Question

You deposit all of your graduation money, $2,560, into an account earning 3.5% interest, compounded annually. You want to let it sit, no deposits or withdraws, while you are in college for 4 years. How much will you have at the end of 4 years? Round to the nearest cent.

Answer 1

Answer:

To calculate compounded interest, use the compound interest formula.

A(t)=P(1+rn)n⋅t

Recognize the information given in the problem.

P=2560,r=0.035,n=1,t=4

Substitute the values into the appropriate position in the formula.

A(4)=2560(1+0.0351)1⋅4

Simplify by multiplying and dividing by 1.

A(4)=2560(1+0.035)4

Simplify using the order of operations.

A(4)=$2,937.66

The balance at the end of 4 years would be $2,937.66.

Step-by-step explanation: