Suppose that you deposit $2,828 in your savings account, which pays 4% interest annually. What is your account balance at the end of four years?

Question

Quizplus · Accepted Answer

The account balance at the end of four years can be calculated using the formula for compound interest: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($2,828), r is the annual interest rate (4% or 0.04), n is the number of times that interest is compounded per year (in this case, it's compounded annually, so n = 1), and t is the time the money is invested for in years (4 years). Plugging in the values: A = 2828(1 + 0.04/1)^(1*4) = 2828(1.04)^4 = $3,308.36.

Suppose That You Deposit $2,828 in Your Savings Account, Which