Make a table to find the balance in an account starting with $135 at 5% compounded annually for 2 years. In your last calculation, round to the nearest cent.
1 $136.10
2 $148.84
3 $141.75
4 $148.50
i think its 3 please help
P = Po(1+r)^n.
Po = $135.
r = 0.05.
n = 2 compounding periods.
P = 135(1+0.05)^2 =
no
What makes you think it is 3?
Reiny i dont know thats why im asking for help
would it be 4 because 135*0.05*2=13.5 and then add that to 135 to get 148.5
no,
135(1.05)^2
= 135(1.1025
= 148.8375
which would be $148.84
formula: amount = principal( 1 + rate)^n
To calculate compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A is the final amount (balance),
P is the principal amount (initial balance),
r is the annual interest rate (in decimal form),
n is the number of times that interest is compounded per year, and
t is the number of years.
In this case, the principal amount (P) is $135, the interest rate (r) is 5%, and the number of years (t) is 2. The interest is compounded annually (n = 1).
Now, let's calculate the balance for each year:
For Year 1:
A = 135(1 + 0.05/1)^(1*1) [Using the compound interest formula]
A = 135(1 + 0.05) [Simplifying]
A ≈ $141.75 [Rounded to the nearest cent]
For Year 2:
A = 135(1 + 0.05/1)^(1*2) [Using the compound interest formula]
A = 135(1 + 0.05)^2 [Simplifying]
A ≈ $148.84 [Rounded to the nearest cent]
Based on the calculations, the correct balance in the account after 2 years at a compound interest rate of 5% would be approximately $141.75 (Year 1) and $148.84 (Year 2). Therefore, option 3 ($141.75) is the correct answer.