Question 116932: I need help!! I'm not sure if i'm working this right.
a = p(1+r/n)^nt
solve for a
p = 4000
r = 0.07
n = 1
t = 8 so...
a = 4000(1+0.07/1)^(1)(8)
Answer by bucky(2189)   (Show Source):
You can put this solution on YOUR website! a = p(1+r/n)^nt
solve for a
p = 4000
r = 0.07
n = 1
t = 8 so...
a = 4000(1+0.07/1)^(1)(8) <=== a couple of comments as follows:
.
You should probably put the 0.07/1 in parentheses just as a matter of practice so that others
can tell that you are just dividing the rate by the number of compounding periods. In other words
write it as:
.
a = 4000(1+(0.07/1))^(1)(8)
.
It is not necessary to do that, but it might help someone who reads it not mess up what you
meant.
.
Another comment. You should write the exponent as (1*8) for the same reason. According to the
rules of algebra, the way you wrote it tells people to raise (1+(0.07/1)) to the first power
and then to multiply that result by 8 ... that is not what you meant at all. You meant that the
exponent is (1*8) or 8. So the problem should have the exponent written as:
.
a = 4000(1+(0.07/1))^(1*8)
.
Other than those suggestions, you have the problem correct. You can now simplify it a little.
Inside the parentheses, divide the 0.07 by 1 to get just 0.07 and then add that to the 1 so
that the problem reduces to:
.
a = 4000(1.07)^(1*8)
.
multiply out the exponent and the problem becomes:
.
a = 4000(1.07)^8
.
You can now multiply 1.07 times itself 8 times or use a scientific calculator to find that
1.07^8 = 1.71818618. Substitute that and the problem reduces to:
.
a = 4000*1.71818618
.
and this multiplies out to give:
.
a = 6872.744719
.
which tells you that if you invest $4000 at an interest rate of 7% compounded annually for
8 years you will have $6872.74 before the government gets its share in the form of income tax.
.
Hope this helps you to figure out how to do problems like this ... You did very well in
setting up the problem. Keep up the good work!!!
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