Question

Henry begins a savings account with $500. The savings account accumulates 2.5% annual interest based on the

Answer 1

After t years, the expression that can be used to represent the money in Andres's account is A = P(1 + r/n)^nt

for t = 3

Answer:

A = $538.45

Compound interest Computation

Given Data

Principal  P = $500

Rate r = 2.5%

Time t = 3 years

A = P + I where

P (principal) = $500.00

I (interest) = $38.45

Calculation Steps:

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

r = R/100

r = 2.5/100

r = 0.025 rate per year,

Then solve the equation for A

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

A = 500.00(1 + 0.025/1)^(1)(3)

A = 500.00(1 + 0.025)^(3)

A = $538.45

Summary:

The total amount accrued, principal plus interest, with compound interest on a principal of $500.00 at a rate of 2.5% per year compounded 1 times per year over 3 years is $538.45.

Learn more about compound interest here:

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