Question

A $3300 principal earns 4% intrest, compounded annually. After 3 years, what is the balance in the account.

Answer 1

This can be answered using the following formula for interest:

Let:
F = future value
P = principal value
n = interest period (n = 3)
i = interest percentage

F = P(1 + i)^n

Substituting the given values, we arrive at the following:
F = 3300(1 + 0.04)^3
F = 3712.05

Therefore, after 3 years, the balance in the account will be $3712.05