Question

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

Answer 1

Your Principal, P, is $400.  Your interest rate, expressed as a decimal, is 0.03.  Here, n is 1, since there is just 1 compounding period per year.

How much would you have after 16 years under such circumstances?

A = Amount = $400(1+0.03)^16.       =>    $400 (1.03)^16  = $400(1.60)

Thus, you would have accumulated $641.88 after 16 years.  Sounds like a pretty good deal to me.     ;)