Question

Janae deposits $800 in a savings account. The money is left on deposit for 3 years earning 4% compounded annually. Calculate the balance at the end of 3 years.

Answer 1

Balance after 3 year is $900 (Approx.)

Given:

Amount deposit (P) = $800

Number of year (n) = 3 years

Compound annual rate (r) = 4% = 0.04

Find:

Balance after 3 year

Computation:

$A = P(1+r)^n\\\\A = 800(1+0.04)^3\\\\A = 800(1.04)^3\\\\A = 800(1.124864)\\\\A = 899.8912$

A = 900 (Approx.)

Balance after 3 year = $900 (Approx.)

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