SOLUTION: Use the compound interest formulas A=P(1+r/n)^nt and A=Pe^rt to solve Find the accumulated value of an investment of $140 at 3% compounded annually for 16 years. Show work.

Algebra ->  Finance -> SOLUTION: Use the compound interest formulas A=P(1+r/n)^nt and A=Pe^rt to solve Find the accumulated value of an investment of $140 at 3% compounded annually for 16 years. Show work.      Log On


   

Question 1096502: Use the compound interest formulas A=P(1+r/n)^nt and A=Pe^rt to solve
Find the accumulated value of an investment of $140 at 3% compounded annually for 16 years. Show work.
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!

Use the compound interest formula:

A+=+P%281%2Br%2Fn%29%5E%28n%2At%29

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where,

A = amount in the account after t years
P = initial amount invested
r = interest rate (in decimal form)
n = compounding frequency
t = number of years

In this case,

A = unknown (we're solving for this)
P = 140
r = 0.03 (3% = 3/100 = 0.03)
n = 1 (the money is compounded 1 time per year)
t = 16

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Plug all these values into the formula to get...

A+=+P%281%2Br%2Fn%29%5E%28n%2At%29

A+=+140%281%2B0.03%2F1%29%5E%281%2A16%29

A+=+140%281%2B0.03%29%5E%281%2A16%29

A+=+140%281.03%29%5E%281%2A16%29

A+=+140%281.03%29%5E%2816%29

A+=+140%281.60470643909879%29

A+=+224.65890147383

A+=+224.66 Round to the nearest cent (hundredth)

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Final Answer: $224.66