Question

What is the balance after 7 years if you deposit $2800 in an account that pays 4% interest compounded yearly ?

Answer 1

Answer:the balance after 7 years is $3216

Step-by-step explanation:

A) Initial amount deposited into the account is $2800 This means that the principal,

P = 2800

It was compounded yearly. This means that it was compounded once in a year. So

n = 1

The rate at which the principal was compounded is 4%. So

r = 4/100 = 0.04

It was compounded for 7 years. So

t = 7

The formula for compound interest is

A = P(1+r/n)^nt

A = total amount in the account at the end of t years. Therefore

A = 2800(1 + 0.04/2)^ 1× 7

A = 2800(1 + 0.02)^7

A = 2800(1.02)^7

A = $3216