Question

A customer deposits $500 in an account that pays 4% annual interest. What is the balance after 3 years if the interest is compounded annually? Compound interest formula: V (t) = P (1 + StartFraction r Over n EndFraction) Superscript n t t = years since initial deposit n = number of times compounded per year r = annual interest rate (as a decimal) P = initial (principal) investment V(t) = value of investment after t years

Answer 1

Answer:

$562.43

Step-by-step explanation:

V(3) = $500 ( 1 + \frac{0.04}{1} )^{3} \\500 (1.04)^{3}$

     = 562.43

Answer 2

The interest is $562.4 compounded annually.

What is Compound interest?

Compound interest is defined as interest paid on the original principal and the interest earn on interest of principal.

P = $500

r = 4%

t = 3 years

CI = P( 1+ r/100)ⁿ

CI = 500 ( 1+ 4/100)³

CI = 500 ( 1+ 0.04)³

CI = 500 ( 1.04)³

CI = 500 ( 1.1248)

CI = 562.4

Hence, the interest is $562.4 compounded annually.

Learn more about Compound interest here:

brainly.com/question/25857212

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