Actually calculate the final amount on $1000 compounded annually at 6% per year for 4 years. Question Actually calculate the final amount on $1000 compounded annually at 6% per year for 4 years. in progress 0 Math Arya 3 months 2022-02-15T14:38:13+00:00 2022-02-15T14:38:13+00:00 1 Answer 0 views 0

## Answers ( )

Answer: the final amount is $1262.5

Step-by-step explanation:

Initial amount in the account is $1000 This means that the principal is

P = 1000

It was compounded annually. This means that it was compounded once in a year. So

n = 1

The rate at which the principal was compounded is 6%. So

r = 6/100 = 0.06

It was compounded for 4 years. So

t = 4

The formula for compound interest is

A = P(1+r/n)^nt

A = total amount in the account at the end of t years. Therefore

A = 1000 (1 + 0.06/1)^1×4

A = 1000(1.06)^4 = $1262.5