How much would $400 be worth after 16 years, if it were invested at 3% interest compounded annually? (Use the formula below and round your answer to the nearest cent.) A(t)=P(1+ r/n)^nt

Mathematics · College · Tue Nov 03 2020

Answered on

Given:

Principal Amount ( P ) =$400

Interest rate ( r ) = 3% or 0.03

Term ( t ) = 16 years

Compounded annualy ( n ) = 1 

Formula for Compoud Interest:

A(t)=P(1+ r/n)^nt

Solution:

Substitute the given values of P, r, n and t to the formula for the compound interest.

A (16) = $400(1 + 0.03/1)^(1)(16)

A (16) = $400(1.03)^16

A(16) =$641.88

Final answer:

A(16) =$641.88

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