Step 1: Problem
Compound interest
Step 2: Concept
[tex]\begin{gathered} A=P(1+r)^t \\ A\text{ = amount or balance or future value} \\ P\text{ = principal} \\ r\text{ = rate} \\ t\text{ = time} \end{gathered}[/tex]
Step 3: Method
A = ?
r = 3% = 3/100 = 0.03
t = 4 years
P = $ 1,000
[tex]\begin{gathered} A=P(1+r)^t \\ A=1000(1+0.03)^4 \\ A\text{ = 1000 }\times1.03^4 \\ A\text{ = 1000 X 1.1255} \\ A\text{ = \$1125.5} \end{gathered}[/tex]
