Find the balance in the account after the given period.$12,000 principal earing 4.8% compounded annually after 7 years.
Question
Find the balance in the account after the given period.$12,000 principal earing 4.8% compounded annually after 7 years.
Solution
To find the balance in the account after 7 years, we can use the formula for compound interest, which is:
A = P (1 + r/n)^(nt)
where: A = the amount of money accumulated after n years, including interest. P = principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years
Given in the problem: P = $12,000 r = 4.8/100 = 0.048 (you divide by 100 to convert the percentage into a decimal) n = 1 (since the interest is compounded annually) t = 7 years
Substitute these values into the formula:
A = 12,000 (1 + 0.048)^7 A = $12,000 * 1.048^7
Now, calculate the value:
A = 16,479.16
So, the balance in the account after 7 years would be approximately $16,479.16.
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