Suppose you deposit $600 in a savings account. The interest rate is 4% per year. Find the principal balance in the account after six years

600 * 1.04^6

To find the principal balance in the account after six years, we need to calculate the amount of interest earned and add it to the initial deposit.

First, let's calculate the amount of interest earned. The interest rate is 4% per year, so the annual interest can be calculated by multiplying the principal (initial deposit) by the interest rate: 600 * 0.04 = $24.

Since the interest is compounded annually, after the first year, the balance in the account would be the initial deposit ($600) plus the interest earned ($24): $600 + $24 = $624.

Now, we can apply the same process for each subsequent year:

- At the end of the second year, the balance in the account would be the previous balance ($624) plus the interest earned on that balance: $624 + ($624 * 0.04) = $624 + $24.96 = $648.96.

- At the end of the third year, the balance would be: $648.96 + ($648.96 * 0.04) = $648.96 + $25.96 = $674.92.

By applying this process for each year up to six years, we can find the principal balance in the account.