Try the fastest way to create flashcards
Question

# By using the compound interest formula to compute the balance in account after the stated period of time, assuming that interest is compounded annually. $\ 3000$ is invested at an APR of $1.8 \%$ for $12$ years.

Solution

Verified
Step 1
1 of 4

The goal is to calculate the balance in an account that has $\3000$ invested at an annual percentage rate of $1.8\%$ for $12$ years.

Assume that the account earns compound interest.

To calculate the balance, apply the Compound Interest Formula for interest paid once a year:

$A=P\times (1+APR)^Y$

where

$A$ is the accumulated balance after $Y$ years. $P$ is the starting principal $APR$ is the annual percentage rate (as a decimal) $Y$ is the number of years

## Recommended textbook solutions #### Statistical Techniques in Business and Economics

15th EditionISBN: 9780073401805 (11 more)Douglas A. Lind, Samuel A. Wathen, William G. Marchal
1,236 solutions #### Using and Understanding Mathematics: A Quantitative Reasoning Approach

7th EditionISBN: 9780134705187 (3 more)Jeffrey O. Bennett, William L. Briggs
3,437 solutions #### Financial Algebra

1st EditionISBN: 9780538449670 (1 more)Richard Sgroi, Robert Gerver
2,606 solutions #### Financial Algebra: Advanced Algebra with Financial Applications

2nd EditionISBN: 9781337271790Richard Sgroi, Robert Gerver
3,016 solutions