On January 1, 2019, Alex deposited $3,500 into a savings account that pays interest of 8 percent, compounded annually. If he makes no further deposits or withdrawals, how much will Alex have in his account on December 31, 2021 (3 years later)?

Question

Quizplus · Accepted Answer

The amount in the account after 3 years can be calculated using the formula for compound interest: A = P(1 + r)^n, where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (decimal), and n is the number of years the money is deposited or borrowed for. Here, P = $3,500, r = 8% or 0.08, and n = 3 years. So, A = $3,500(1 + 0.08)^3 = $3,500(1.08)^3 = $4,409.

On January 1, 2019, Alex Deposited $3,500 into a Savings