SOLUTION: if you had $36000 compound 5% per year then compounded it 35 years, what would it be?

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Question 389775: if you had $36000 compound 5% per year then compounded it 35 years, what would it be?
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
I'm assuming you're compounding once a year.


Recall that the compound interest formula is

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

where A is the return, P is the principal (ie amount invested), r is the interest rate (in decimal form), n is the compounding frequency (per year), and t is the time in years.


A=P%281%2Br%2Fn%29%5E%28n%2At%29 Start with the compound interest formula


A=36000%281%2B0.05%2F1%29%5E%281%2A36%29 Plug in P=36000, r=0.05 (the decimal equivalent of 5%), n=1 and t=36.


A=36000%281%2B0.05%29%5E%281%2A36%29 Evaluate 0.05%2F1} to get 0.05


A=36000%281.05%29%5E%281%2A36%29 Add 1 to 0.05 to get 1.05


A=36000%281.05%29%5E%2836%29 Multiply 1 and 36 to get 36.


A=36000%285.79181613597187%29 Evaluate %281.05%29%5E%2836%29 to get 5.79181613597187.


A=208505.380894987 Multiply 36000 and 5.79181613597187 to get 208505.380894987.


A=208505.38 Round to the nearest hundredth (ie to the nearest penny).


So after 36 years, you would have about $208,505.38 in the account.