A customer deposits $500 in an account that pays 4% annual interest. what is the balance after 3 years if the interest is compounded annually? compound interest formula: mc017-1.jpg t = years since initial deposit n = number of times compounded per year r = annual interest rate (as a decimal)

Going to add on to your variables for the sake of the formula.

Let A = the amount after T years.
P = Principal amount

[tex]A = P(1 + \frac{r}{n})^{nt} [/tex]

[tex]A = 500(1 + \frac{0.04}{1})^{1(3)} [/tex]

[tex]A = 500(1 + \frac{0.04}{1})^{3} [/tex]

[tex]A = 562.432 [/tex] or ≈ $562.43

The customer would have $562.43 at the end of 3 years.

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pinquancaro pinquancaro · Answer 2 · 2019-10-31T05:11:23+01:00

Answer:

The balance after 3 years if the interest is compounded annually is $562.432.

Step-by-step explanation:

Given : A customer deposits $500 in an account that pays 4% annual interest.

To find : What is the balance after 3 years if the interest is compounded annually?

Solution :

The compound interest formula,

[tex]A = P(1 +\frac{r}{n})^{nt}[/tex]

Where, A is the amount

P is the principal P=$500

r is the interest rate r=4%=0.04

t is the time t=3 years

n is number of times compounded per year n=1

Substitute the value in the formula,

[tex]A = 500(1 +\frac{0.04}{1})^{1(3)}[/tex]

[tex]A = 500(1+0.04)^{3}[/tex]

[tex]A = 500(1.04)^{3}[/tex]

[tex]A =562.432[/tex]

Therefore, the balance after 3 years if the interest is compounded annually is $562.432.