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Maureen opened a savings account and deposited $800.00 as principal. The account earns 5% interest,
compounded annually. What is the balance after 6 years?
Use the formula A = ,
where A is the balance (final amount), P is the principal (starting amount),
r is the interest rate expressed as a decimal, n is the number of times per year
that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.
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Use the given formula with all explanations given
A = = = 1134.43 dollars. ANSWER
Solved.
In such calculations, the major moment is do not make intermediate rounding.
The rounding should be made only once at the end.
In my calculations I used MS Excel, which works with 15 decimal signs,
providing the necessary precision.