Question

Suppose Allonzo pays $3000 in an account that pays 19% interest compounded each year. Assume that no withdraws are made from the account. Follow the instructions below. Do not do any roundingA/ find the amount in the account at the end of one yearB/ find the amount in the account at the end of two years

Answer 1

Answer:

A) $3,570

B) $4,248.30

Explanation:

We were given that:

Principal, P = $3,000

Interest Rate, r = 19% = 19/100 = 0.19

Compounding, n = yearly = 1

Time, t = ?

We will proceed to solve for the amount in the account as shown below:

A) At the end of one year:

$\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ Time,t=1year \\ A=3000(1+\frac{0.19}{1})^{1*1} \\ A=3000(1+0.19)^1 \\ A=3000(1.19) \\ A=\text{\ }3,570 \end{gathered}$

B) At the end of two years:

$\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ Time,t=2years \\ A=3000(1+\frac{0.19}{1})^{1*2} \\ A=3000(1+0.19)^2 \\ A=3000(1.19)^2 \\ A=\text{\ }4,248.30 \end{gathered}$