SOLUTION: Can someone help me with this problem? If $7,800 is deposited into an account paying 6% interest compounded annually (at the end of each year), how much money is in the accoun

Algebra ->  Percentages: Solvers, Trainers, Word Problems and pie charts -> SOLUTION: Can someone help me with this problem? If $7,800 is deposited into an account paying 6% interest compounded annually (at the end of each year), how much money is in the accoun      Log On


   

Question 41786: Can someone help me with this problem?
If $7,800 is deposited into an account paying 6% interest compounded annually (at the end of each year), how much money is in the account after 2 years?
Thanks,
Lyn
Answer by psbhowmick(878) About Me  (Show Source):
You can put this solution on YOUR website!
The general formula is
A+=+P%2A%281+%2B+I%2F100%29%5Et
where P = principal that becomes amount = A in 't' years at the rate I% compound interest per annum.
Here I = 6% per year and time t = 2 years.
Put P = 7800, I = 6 and t = 2 in the formula.
You get
A+=+7800%2A%281%2B6%2F100%29%5E2
= 7800%2A%281.06%29%5E2
= 7800 x 1.1236
= 8764.08

Thus, $7800 becomes $8764.08 after 2 yrs. at the rate 6% compound interest per annum.