Linda opened a savings account and deposited 7,000.00 as principal. The account earns 4% interest, compounded annually. What is the balance after 4 years?

Solution

Linda opened a savings account and deposited 7, 000.00 as principal. The account earns 4% interest, compounded annually. What is the balance after 4 years?

Solution

Amount : 8189.01

Solution steps

Translate the problem into an equation:

A = 7000 (1 + \frac{0.04}{1})^{1 \cdot 4}

7000 (1 + \frac{0.04}{1})^{1 \cdot 4} = 8189.00992

Round to the nearest hundredth:

8189.01

Amount : 8189.01

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