Question

Caiden earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. Caiden will not make any additional deposits or withdrawals. What will be his balance after 15 years? Round to the nearest hundredths place.

Answer 1

Caiden's balance after 5 years would be $831

Explanation:

Given:

Principal, p = $475

Rate of interest = 3.8%

time, t = 15 years

Balance after 15 years = ?

We know:

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

where,

n = number of compounding periods

r = rate of interest

t = number of years

Substituting the value;

$A = 475(1+\frac{3.8}{100} )^1^5\\\\A = 831$

Therefore, Caiden's balance after 5 years would be $831