Answered

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You are opening a savings account with $500 that you have saved. The bank offers 3.2% interest, compounded yearly. How much money will you have in you account after 7 years?

Sagot :

Ashraf82

Answer:

You will have $623.3441462 in your account after 7 years

Step-by-step explanation:

The formula of the compounded interest is A = P [tex](1+\frac{r}{n})^{nt}[/tex] , where

  • A is the new value
  • P is the initial value
  • r is the rate in decimal
  • n is the number of periods
  • t is the time in years

∵ You are opening a savings account with $500  

∴ P = 500

∵ The bank offers 3.2% interest, compounded yearly

∴ r = 3.2% ⇒ divide it by 100 to change it to decimal

∴ r = 3.2 ÷ 100 = 0.032

∵ The interest is compounded yearly

∴ n = 1

∵ The time is 7 years

∴ t = 7

→ Substitute these values in the rule above to find A

∵ A = 500 [tex](1+\frac{0.032}{1})^{1(7)}[/tex]

∴ A = 500 [tex](1.032)^{7}[/tex]

∴ A = 623.3441462

∴ You will have $623.3441462 in your account after 7 years

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