Question

Lisa deposits $625 in an account that earns 4% interest
annually. How much money is in the account
compounded
after 3 years? (8.12D)

Answer 1

Answer:

$703.04

Step-by-step explanation:

The equation for this is 625 x $1.04^{years\\}$.

So using the formula 625 x $1.04^{3}$ = $703.04

Answer 2

Answer:

$703.04

Step-by-step explanation:

Compound interest formula

$\sf A=P(1+\frac{r}{n})^{nt}$

where:

• A = final amount
• P = principal
• r = interest rate (in decimal form)
• n = number of times interest applied per time period
• t = number of time periods elapsed

Given:

• P = $625
• r = 4% = 0.04
• n = 1
• t = 3

Substituting given values into the formula:

$\implies \sf A=625(1+\frac{0.04}{1})^{3}$

$\implies \sf A=625(1.04)^{3}$

$\implies \sf A=703.04$