Question

A credit union client deposits $3,300 in an account earning 6.5% interest, compounded annually. What will the balance of the account be at the end of 36 years?

Answer 1

Answer:

The balance of account at the end of 36 years is $31,849.29

Step-by-step explanation:

We are given the following in the question:

P = $3,300

r = 6.5% = 0.065

t = 36 years

The compound interest is given by:

$A = p\bigg(1+\dfrac{r}{n}\bigg)^{nt}$

where A is the amount, p is the principal, r is the interest rate, t is the time in years and n is the nature of compound interest.

Since interest is compounded annualy we use n = 1

$A = 3300\bigg(1+\dfrac{0.065}{1}\bigg)^{36}\\\\A = \ 31,849.29$

Thus, balance of account at the end of 36 years is $31,849.29