$25,000 is invested at 4% compounded annually for 7 years, find the current balance in the bank account based on the given conditions

Question

anonymous · Answer

its for liberal arts

zepdrix · Answer

The formula for finding compound interest is as follows,$$\large A=P\left(1+\frac{r}{n}\right)^{nt}$$

They gave us this information,
~our `principle amount` $P$ is $25,000.
~the `rate of compounding` $r$ is 4%, or as a decimal, 0.04.
~the `time period` $t$ is 7 years.
~the `number of compoundings per period` $n$ is 1 (since it's compounded anually).

So we just plug these values in and solve for $A$! :)

zepdrix · Answer

$$\large A=25000\left(1+\frac{0.04}{1}\right)^{1\times7}$$

zepdrix · Answer

You'll want to use your calculator to simplify that down.
Lemme know if it's too complicated :D