Question

3B What is the value of account after 10 years,
if interest is paid at 3.7%, if no other deposits
or withdrawals are made?
Initial deposit $6500, then compounded annually

Answer 1

Answer:

$9,347.62

Step-by-step explanation:

Compound Interest Formula

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

where:

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

Given:

• P = $6,500
• r = 3.7% = 0.037
• n = 1
• t = 10 years

Substituting the given values into the formula and solving for A:

$\implies \sf A=6500\left(1+\frac{0.037}{1}\right)^{10 \times 1}$

$\implies \sf A=6500\left(1.037\right)^{10}$

$\implies \sf A=9347.617232$

Therefore, the value of account after 10 years is $9,347.62

Answer 2

Let's see

$\\ \rm\Rrightarrow A=P(1+r)^t$

• P=6500
• r=3.7%
• t=10years

So

A:-

$\\ \rm\Rrightarrow 6500(1+0.037)^{10}$

$\\ \rm\Rrightarrow 6500(1.037)^{10}$

$\\ \rm\Rrightarrow \ 9347.6$