Question

christ placed$7,400in savings account which compound interest annually at a rate of 5.7%. how much will he have in the account after 4 years?

Answer 1

We start with an initial value of PV = $7,400.

The annual rate of interest is, in decimal form, r=5.7/100=0.057.

The period of the investment is n=4 years and the interest is compounded yearly.

Then we can calculate the future value FV of this investment as:

$\begin{gathered} FV=PV(1+r)^n \\ FV=7400(1+0.057)^4 \\ FV=7400\cdot1.057^4 \\ FV\approx7400\cdot1.2482 \\ FV\approx9237 \end{gathered}$

Answer:

He will have in his account $9,327 after 4 years.