Question

suppose you deposit 750$ in a savings account that pays 4.8% interest compounded annually . No withdrawals or additional deposits were done, what id the balance after 6 years ?

Answer 1

The Compound Interest Equation

P = C (1 + r/n) nt

where
P = future value
C = initial deposit
r = interest rate (expressed as a fraction: eg. 0.06)
n = # of times per year interest in compounded
t = number of years invested

Source: http://math2.org/math/general/interest.htm

Answer 2

Sorry, I do this every time. The last part of the equation should be to the power of nt, so P=C(1+r/n)^nt

Answer 3

It doesn't copy and paste well.

Answer 4

so whats the balance after 6 years ?

Answer 5

Simplifies to this when the interest is compounded annually

P = C (1 + r)^t

Answer 6

Now you need to put the information that you have into the equation. You know the initial deposit, the interest rate and the number of years,

P = 750(1+0.048)^6

Answer 7

So, back at you. What do you get for a balance after 6 years?

Answer 8

@mathdrills of course you are correct. but it says "annually" so the formula is much simpler. just
\[P(1+r)^y\]

Answer 9

lol, I put that formula in after, but usually the next question asks for a different compounding period, so might as well give the standard equation and the website link right away.