Question

If you invest $500 at 4% interest,compounded annually,how much is in the account at the end of six years?

Answer 1

So, we'll find out how much interest this person will have in 6 years and then add it to the original deposit. To do this we will multiply all the factors:

500 x 0.04 x 6 = 120.
This means they'll have made $120 in interest in 6 years if they don't touch the money. We will add the 120 to the 500.
500+120= 620

They will have a total of $620 in their account after 6 years.