Arlo invested $4000 in an account that earns 5.5% interest compounded annually the formula for compound interest interest is A (t) = P (1+l). How much did arlo have in the account after 4 years

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Mathematics

Rosemary Montoya

9 December, 20:17

Arlo invested $4000 in an account that earns 5.5% interest compounded annually the formula for compound interest interest is A (t) = P (1+l). How much did arlo have in the account after 4 years

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Abraham Riggs · Answer 1

For compounding interests, we use the equation F = P (1+i) ^n where F is the future amount of the principal amount, P, in n years. Take note that the interest to be used should be the effective interest rate. In this case, it is already the effective interest rate.

F = P (1+i) ^n

F = $4000 (1+.055) ^4

F = $4955.2986