Question

Seema deposited $800 in a saving account earning 2.88% compounded annually. To the nearest cent, how much will she have in 16 years? Do not include the dollar sign in your answer.​

Answer 1

Answer:

1260.04

Step-by-step explanation:

The formula for compound interest is:

A = P(1+$\frac{r}{n}$$)^{nt}$ where A is the final amount, P is the initial principal balance, r is the interest rate, n is the number of times interest applied per time period and t is the number of time periods elapsed. Since the deposit was compounded annually, just like the interest, we can omit the n in the equation.

Applying the formula to question:

800(1+$\frac{2.88}{100}$$)^{16}$ = 1260.04 (rounded off to nearest cent since it's money)