Question

Suppose Heather places $3500 in an account that pays 11% interest compounded each year.Assume that no withdrawals are made from the account.
1) find the amount in the account at the end of 1 year.
2)find the amount in the account at the end of 2 years.

Answer 1

Answer:  1) $3885   2) $4312.35

Step-by-step explanation:

The formula to find the compound amount is given by :-

$A=P(1+r)^t$, where P is the principal amount , r is the rate of interest and t is the time period.

Given : Principal amount : $P=\ 3500$ ,

Rate of interest : $r=0.11$

When t=1 , then the amount in the account at the end of 1 year:-

$A=3500(1+0.11)^1=\ 3885$

When t=2 , then the amount in the account at the end of 1 year:-

$A=3500(1+0.11)^2=\ 4312.35$