Question

You invest $1,000 in an account that earns 4.5%

Answer 1

Investing $1000, compounding the interest once in a year will yield a final Amount of $1,935.28.

Given data

Principal = $1000

Rate = 4.5%

Time = 15 years

Calculation Steps:

First, convert R as a percent to r as a decimal

r = R/100

r = 4.5/100

r = 0.045 rate per year,

Then solve the equation for A

A = P(1 + r/n)^nt

A = 1,000.00(1 + 0.045/1)^(1)(15)

A = 1,000.00(1 + 0.045)^(15)

A = $1,935.28

Summary:

The total amount accrued, principal plus interest, with compound interest on a principal of $1,000.00 at a rate of 4.5% per year compounded 1 times per year over 15 years is $1,935.28.

Learn more about compound interest here:

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