Question

How much would $500 invested at 6% interest compounded annually be worth after 4 years

Answer 1

Remember your formula for compound interest, then just plug the numbers in and calculate. The formula is A=P(1+r)^t where A is the new amount or in this case, your answer. P is the principle you invested. r is the interest rate divided by 100 so you will have a decimal. t is the time in years. This means your formula is A=500(1+.06)^4 Now get out your handy, dandy calculator and you got it!!

Answer 2

A = P(1 + r)^t
A = 500(1 + .06)^4
A = $631.24