Question

$53,000 is placed in an investment account that grows at a fixed rate of 2% (compound growth) per year. how much is in the account after four years? round your answer to the nearest whole number.

Answer 1

Answer:

$57,369

Step-by-step explanation:

We have been given that an amount of $53,000 is placed in an investment account that grows at a fixed rate of 2% (compound growth) per year. We are asked to find the amount in the account after 4 years.

To solve our given problem we will use compound interest formula.\

$A=P(1+\frac{r}{n})^{nt}$, where,

A = Final amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

t = Time in years.

Let us convert our given rate in decimal form.

$2\%=\frac{2}{100}=0.02$

Upon substituting our given values in compound interest formula we will get,

$A=\ 53,000(1+\frac{0.02}{1})^{1*4}$

$A=\ 53,000(1+0.02)^{4}$

$A=\ 53,000(1.02)^{4}$

$A=\ 53,000*1.08243216$

$A=\ 57368.90448\approx \ 57,369$

Therefore, an amount of $57,369 will be in the account after 4 years.