Question

you are given the principal in a bank at the beginning of the year and a rate of interest that is compounded annually. calculate the amount in the account at the end of the year. $8,000; 7%what is the amount of money after t = 1 year?

Answer 1

Given:

Principal(P)= $8000 (Initial value)

rate(r) =0.07

time(t) = 1

n = 1 (number of time the interest is compounded)

Using the formula below:

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

Substitute the values and evaluate.

$A=8000(1+\frac{0.07}{1})^{1\times1}$$=8000(1+0.07)$$=8000(1.07)$$=8560$

Therefore, the amount of money after t = 1 year is $8560.