Question

find the balance in each account. you deposit $2500 in a savings account with 3% interest compounded annually. what is the balance in the account after 6 years?

Answer 1

Given:

Deposit amount is, P = $2500.

Rate of interest is, r = 3%.

The objective is to find the balance in the account after 6 years.

The formula to find the compound interest is,

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

Here, p stands for principal amount, r stands for rate of interest, n stands for number of times compounded annually, t representst 9

Now, substitute the given values in the above equation.

$\begin{gathered} A=2500(1+\frac{0.03}{1})^{1(6)} \\ A=2500(1+0.03)6 \\ A=2500(1.03)^6 \\ A=2985.13\text{ dollars.} \end{gathered}$

Hence, the balance in the account after 6 years is $2985.13