Question

THE amount A that principal P will be worth after t years at interest rate r,compounded annually,is given by this formula

A=P(1+r)T

suppose 4000 principal is invested at 6% interest compounded annually for five years.how much money would the investment yield after 5 years

Answer 1

@ganeshie8

Answer 2

@phi

Answer 3

@mathmale

Answer 4

Hi. What specifically would you like to know? This problem deals mostly with substituting known values into a known formula and calculating the amount of $ you'd accumulate.

Answer 5

i forgot how to solve these problem but are we looking for the interest rate

Answer 6

Quoting the problem statement: " invested at 6% interest compounded annually " Thus, r=0.06.

Answer 7

You're not looking for the interest rate; that's given. You're looking to find the amount of money that would accumulate over five years if you invested $4,000 up front and if interest were to be compounded annually (1 time per year).

Answer 8

ohh do i have to find the amount of p

Answer 9

p represents "principal" and is the amount you invest up front; that's given in the problem statement: "4000 principal."

Answer 10

summary: P=principal=$4,000
r=interest rate as a decimal fraction=0.06
t=number of years=5

Answer 11

would the answer be 1200.

Answer 12

A=P(1+r)T is not correct; it should be\[A=P(1+r)^t\]

Answer 13

show me your work, please.

Answer 14

i multiply 4000 x 0.06 x 5

Answer 15

to get 1200.00

Answer 16

Please compare the formula I've given you with what you actually did: \[A=P(1+r)^t\]

Answer 17

Try again, please.

Answer 18

4000(1+0.06)5

Answer 19

21200

Answer 20

Sorry to have to be picky, but you are not treating the number of years, t, which =5, properly. That t is an exponent.

Please start over. I need to see y our work and am not much interested in the "answer."

Answer 21

Please note that (1+0.06)5 is not the same as (1+0.06)^5, which you should be using.

Answer 22

4000(1+0.06)^5

Answer 23

5352.

Answer 24

Better. Combine 1 and 0.06 to obtain 1.06.

Please show how you got that $5,352.

Answer 25

i used my caculator and put in the equation

Answer 26

You want A=Amount=$5,000(1.06)^5.

what is (1.06)^5?

Answer 27

1.338

Answer 28

and, if you multiply that by $5,000, what do you get?

Answer 29

6691.12

Answer 30

Right. Better. How did you get 5352. earlier?

Answer 31

4000(1+0.06)^5

Answer 32

OK. In this case I'm wrong because I was using $5000 instead of $4000 as the principal.
Please, read through our conversation and take notes, so that you'll be better prepared next time to type out the problem and evaluate those exponentials properly.

Answer 33

Again, (1.06)5 is not the same thing as (1.06)^5. The first one involves multiplication, the second exponentiation, and it's the exponentiation that is necessary here.

Answer 34

so was i right with my answer of 5352.

Answer 35

Again I'd prefer that you check your work. (1.06)^5=?

Answer 36

1.338

Answer 37

Good; now multiply that by $4,000 (including the $ sign).

Answer 38

53.52

Answer 39

You got 1.338 and I asked you to multiply that by $4,000. Where did the 53.52 come from?

Answer 40

5352

Answer 41

Better. Please, include the units of measurement. The amount you'll have after 5 years under these terms will be A = ??

Answer 42

$5352

Answer 43

Very good. Again, please review our conversation. All of this becomes easier with practice.

You've shown that you can use your calculator, but need a lot of prompting along the way.

Are we done now?

Answer 44

yea but im confused ive been saying 5352 in the middle of this conversation and you said it was wrong

Answer 45

that was because I mistakenly used $5000 as the principal, whereas the correct amount is $4000.

Answer 46

oh thanks for the help

Answer 47

The more you show your work, the better I can give y ou accurate feedback.

For example: Type out these steps:

A=$4000(1+0.06)^5

A=$4000(1.06)^5

A=$4000 (1.338)

A=$5352

Answer 48

thank you for the medal, Panda!