Question

Camden invested $1400 in an account that pays 4.5% interest compounded annually Assuming no deposits or withdrawals are made, find how much money Camden would have in the account 12 years after his initial investment. Round to the nearest tenth ( if necessary)

Answer 1

The amount of money Camden would have in his account after 12 years is equal to $2,374.3.

How to calculate compound interest.

To calculate how much money Camden would have in his account after 12 years, we would use the formula for compound interest.

Mathematically, compound interest is given by this formula:

$A=P(1+r)^t$

Where:

• A is the balance.

• P is the principal or starting amount.

• R is the interest rate.

• T is the time measured in years.

Given the following data:

Principal = $1400.

Interest rate = 4.5% = 0.045.

Time = 12 year.

Substituting the given parameters into the formula, we have;

$A=1400(1+0.045)^{12}\\\\A=1400(1.6959)$

A = $2,374.3.

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