You invest $2,000 in an account that has an annual interest rate of 3.2%, compounded annually. How much money will be in the account after 12 years? Round your answer to the nearest whole number.

Question

cakemeister · Answer

Does this use the formula A=P(1+r)/nt ?

kl0723 · Answer

yep

kl0723 · Answer

$$A = P(1+\frac{ r }{ n })^{nt}$$
 
P = principal amount (the initial amount you borrow or deposit)
r  = annual rate of interest (as a decimal)
t  = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n  =  number of times the interest is compounded per year

kl0723 · Answer

your problem is compounded so it is actually the formula above :)

kl0723 · Answer

@onelove26 let me know if you need more help

anonymous · Answer

(where t = 1, because it's compounded annually = once a year)

kl0723 · Answer

@mg_omg yes :)

cwrw238 · Answer

wheer n = 1 , t = 15

cwrw238 · Answer

sorry  t = 12

anonymous · Answer

so, @kl0723 the equation would be: A=2,000(1+3.2/12)^1*12
Is that correct? or am I wrong?

kl0723 · Answer

is right but remeber the rate has to be in decimal form, you have it in percentage

kl0723 · Answer

to get the percentage in decimal form just divide the value by 100

anonymous · Answer

which then I will get: .032

anonymous · Answer

So how will I exactly go about solving this?

kl0723 · Answer

that is 0.032

anonymous · Answer

okay. but how will I exactly go about solving this type of equation? @kl0723

kl0723 · Answer

just solve for A, you have all the values you need to do so

anonymous · Answer

should I divide .032 by 12 first??

anonymous · Answer

@kl0723