Mary wants to have $8500 to travel to South America when she is 21. She currently has $6439 in a savings account earning 4% annual compound

Question

Mary wants to have $8500 to travel to South America when she is 21. She currently has $6439 in a savings account earning 4% annual compound interest. Mary is 13 now. If Mary does not take out or deposit any money, how much money will Mary have when she is 15?

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Bella 1 week 2021-09-08T23:04:41+00:00 2 Answers 0

Answers ( )

    0
    2021-09-08T23:05:53+00:00

    Answer: she would have $6964.4 when she is 15 years.

    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

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

    Where

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

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $6439

    r = 4% = 4/100 = 0.04

    n = 1 because it was compounded once in a year.

    t = 15 – 13 = 2 years

    Therefore,.

    A = 6439(1 + 0.04/1)^1 × 2

    A = 6439(1.04)^2

    A = $6964.4

    0
    2021-09-08T23:05:53+00:00

    The answer: $6964.42

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