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17 April, 05:37

What is the balance after 7 years if you deposit $2800 in an account that pays 4% interest compounded yearly?

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  1. 17 April, 05:54
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    Answer:the balance after 7 years is $3216

    Step-by-step explanation:

    A) Initial amount deposited into the account is $2800 This means that the principal,

    P = 2800

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

    n = 1

    The rate at which the principal was compounded is 4%. So

    r = 4/100 = 0.04

    It was compounded for 7 years. So

    t = 7

    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 = 2800 (1 + 0.04/2) ^ 1 * 7

    A = 2800 (1 + 0.02) ^7

    A = 2800 (1.02) ^7

    A = $3216
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