Send deposits $3,500 into a new account at his bank the bank pays at 5.5% interest compounded annually on this account then makes no additional deposits or withdrawals what would be the balance of the account at the end of 3 years
To calculate the balance of the account at the end of 3 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount (initial deposit)
r = annual interest rate (in decimal form)
n = number of times that interest is compounded per year
t = number of years the money is invested for
In this case:
P = $3,500
r = 5.5% = 0.055
n = 1 (compounded annually)
t = 3 years
Plugging in the values:
A = $3,500(1 + 0.055/1)^(1*3)
A = $3,500(1.055)^3
A = $3,500(1.172324875)
A = $4,106.13
Therefore, the balance of the account at the end of 3 years would be $4,106.13.