Harvey deposited 6,000 into a new account at his bank the bank pays 4.5% interest compounded annually on this account Harvey makes no additional deposits or withdrawals what would be the balance of the account at the end of 6 years
The formula to calculate the compound interest on an account is:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount (the initial amount of money deposited)
r = the annual interest rate (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for
In this case:
P = $6,000
r = 4.5% = 0.045
n = 1 (since it is compounded annually)
t = 6 years
Plugging these values into the formula:
A = $6,000(1 + 0.045/1)^(1*6)
A = $6,000(1.045)^6
A = $6,000(1.287626)
A = $7,725.76
Therefore, the balance of the account at the end of 6 years would be $7,725.76.