Question

On your birthday, you deposit $540.00 in a account that pays 6% interest, compounded annually. How much is in the account 3 years later?

Answer 1

Since you are dealing with only 3 years, just calculate it one year at a time.

Answer 2

OK

Answer 3

Start: $540
After 1 year: $540 * 1.06
After 2 years: ($540 * 1.06) * 1.06 = $540 * 1.06^2
After 3 years: ($540 * 1.06 * 1.06) * 1.06 = $540 * 1.06^3

Answer 4

Thank you I got my ANSWER

Answer 5

Great.