Question

Ian puts 300.00 into an account to use for school expenses the account earns 6%interest compounded annually how much will be in the account after 10 years

Answer 1

This problem is about componded interest. The formula for compounded interest is:

$\begin{gathered} \text{Amount}=\text{Initial}\cdot(1+r)^t \\ \text{Where,} \\ \text{Amount is the total acumulative at time t.} \\ \text{Initial is the initial amount, at t=0} \\ r\text{ is the interest in decimal number.} \\ t\text{ is the time accordingly the interest, in this case is in years.} \end{gathered}$

In this case, Initial = 300, r = 0.06 and t=10 so the total amount in the account after 10 years is:

$\begin{gathered} \text{Amount}=300\cdot(1+0.06)^{10} \\ \text{Amount}=300\cdot1.06^{10} \\ \text{Amount}=300\cdot1.79085 \\ \text{Amount}=537.255 \end{gathered}$

The amount after 10 years is 573.26.