SOLUTION: Please help me and show work. Thanks $800 is deposited in an account that pays 9% annually interest compounded annually. Find the balance after 4 years.

Algebra ->  Exponential-and-logarithmic-functions -> SOLUTION: Please help me and show work. Thanks $800 is deposited in an account that pays 9% annually interest compounded annually. Find the balance after 4 years.       Log On


   

Question 1035676: Please help me and show work. Thanks
$800 is deposited in an account that pays 9% annually interest compounded annually. Find the balance after 4 years.
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
We will use this formula A+=+P%2A%281%2Br%2Fn%29%5E%28n%2At%29 where...
A = final amount in account after t years
P = principle (amount deposited)
r = interest rate in decimal form
n = compound frequency
t = time in years

In this case,
A = Unknown. We're solving for this
P = 800 dollars is deposited
r = 0.09 (decimal form of 9%)
n = 1 (we're compounding annually, so 1 time per year)
t = 4 years

So we will plug P = 800, r = 0.09, n = 1 and t = 4 into the formula above to get...


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


A+=+800%2A%281%2B0.09%2F1%29%5E%281%2A4%29


A+=+800%2A%281%2B0.09%2F1%29%5E%284%29


A+=+800%2A%281%2B0.09%29%5E%284%29


A+=+800%2A%281.09%29%5E%284%29


A+=+800%2A1.41158161


A+=+1129.265288


A+=+1129.27 Round to the nearest penny


The balance after 4 years is $1129.27

Side Note: this is assuming that no money was withdrawn or that no extra money was deposited. The account is not touched for those 4 years. Also, this is assuming the interest rate does not change over the 4 years.