Question

An investment account earns 4% per year compounded annually if the initial investment was $4000 how much is the account after three years? Round your answer to the nearest dollar

Answer 1

Compounded annualy makes it easier
$A=P(1+r)^t$
A=future amount
P=present amount
r=rate in decimal
t=time in years


given
P=4000
r=4%=0.04
t=3

$A=4000(1+0.04)^3$
$A=4000(1.04)^4$
A=4499.456
round

about $4499 in the account after 3 years

Answer 2

$4000 * (\frac{100+4}{100} )^{3} = 4499.46$

To the nearest dollar, it's $4499.