Stan’s savings account has a balance of $1986. After 23 years, what will the amount of interest be at 4% compounded annually?
a.
$2908.93
c.
$2913.93
b.
$2899.93
d.
$794.40

Question

Stan’s savings account has a balance of $1986. After 23 years, what will the amount of interest be at 4% compounded annually?
a.
$2908.93
c.
$2913.93
b.
$2899.93
d.
$794.40

rane · Answer

do u know the formula for finding compound interest ?

anonymous · Answer

nope

johnweldon1993 · Answer

Do you got this @RANE ?

anonymous · Answer

I need to submit this in 10min so any help would be greatly appreciated!

johnweldon1993 · Answer

Well @GMM You would use the equation

$$P = C(1 + r)^t$$

Where r = your rate *in a decimal form*
C = your original deposit
t = time *in years*

So plugging in your numbers you get...

$$P = 1986(1 + .04)^{23}$$
so

$$P = 1986(1.04)^{23}$$

What do you get when you solve that?

anonymous · Answer

wow your fast johnweldon :)

johnweldon1993 · Answer

Thank you @kelliegirl33 lol :)

johnweldon1993 · Answer

@GMM *Hint ...remember to raise 1.04 to the 23rd power first! Then multiply that answer by 1986

anonymous · Answer

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anonymous · Answer

lol yeah Im thinking Im wrong

rane · Answer

@johnweldon1993 yes i did get it bt i wasnt here

johnweldon1993 · Answer

Ahh okay...sorry for taking over @RANE :)

@GMM 

$$P = 1986(1.04)^{23}$$

I get 

$$P = 4894.92506871$$

Now this is what the total is...you dont want that...you want JUST the interest earned....so take that number....and subtract 1986 from it to find your answer

anonymous · Answer

LOVE YOU thanks!!!!!!!!!!!

rane · Answer

its not a problem @johnweldon1993

rane · Answer

lol @GMM

johnweldon1993 · Answer

lol No problem @GMM