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TheDumDum

  • 3 years ago

$25,000 is invested at 4% compounded annually for 7 years, find the current balance in the bank account based on the given conditions

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  1. TheDumDum
    • 3 years ago
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    its for liberal arts

  2. zepdrix
    • 3 years ago
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    The formula for finding compound interest is as follows,\[\large A=P\left(1+\frac{r}{n}\right)^{nt}\] They gave us this information, ~our `principle amount` \(P\) is $25,000. ~the `rate of compounding` \(r\) is 4%, or as a decimal, 0.04. ~the `time period` \(t\) is 7 years. ~the `number of compoundings per period` \(n\) is 1 (since it's compounded anually). So we just plug these values in and solve for \(A\)! :)

  3. zepdrix
    • 3 years ago
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    \[\large A=25000\left(1+\frac{0.04}{1}\right)^{1\times7}\]

  4. zepdrix
    • 3 years ago
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    You'll want to use your calculator to simplify that down. Lemme know if it's too complicated :D

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