You invest an initial $1,000 in an account that has an annual interest rate of 2.5%, compounded annually. How much money will you have in the account after 6 years? Round your answer to the nearest whole number.

Question

anonymous · Answer

So the formula would be A=Pe^rt, right?
Plug in 1000 for the principal, 2.5% in decimal form for r, and I believe you plug in the equivalent of 6years in months. 
 Does it tell you in the lessons to do that?

Then put the equation into a calculator.

hero · Answer

The formula for annual compound interest is
$$A=P(1+r\space )^{t}$$

hero · Answer

In this case
P = 1000
t = 6
r = .025

anonymous · Answer

so the equation would be A=1000(1+.025)^6

hero · Answer

Correct

anonymous · Answer

my answer would be 1,159.70

anonymous · Answer

rounded though it would be $1,160

anonymous · Answer

Oh, I'm sorry I was thinking of continuous compounding. D: