Given:
Principal= $3000
Rate of interest = 5%
Time = 4 years
n = 1 (compounded annually)
To find:
The balance in the account after 4 years
Solution:
Compound interest formula:
[tex]$A=P\left(1+\frac{r}{n}\right)^{n t}[/tex]
Substitute the given values.
[tex]$A=3000\left(1+\frac{5\%}{1}\right)^{1\times 4}[/tex]
[tex]$A=3000\left(1+5\%\right)^{ 4}[/tex]
To convert percentage into fraction divide by 100.
[tex]$A=3000\left(1+\frac{5}{100} \right)^{ 4}[/tex]
[tex]$A=3000\left(1+0.05 \right)^{ 4}[/tex]
[tex]$A=3000\left(1.05 \right)^{ 4}[/tex]
[tex]$A=3464.5[/tex]
The balance in the account after 4 years is $3464.5.
