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