Suppose that 7,000 is placed in an account that pays 12% interest compounded each year.Assume that no withdrawals are made from the account. find the amount in the account at the end of 1 year.

Solution

Suppose that 7, 000 is placed in an account that pays 12% interest compounded each year.Assume that no withdrawals are made from the account. find the amount in the account at the end of 1 year.

Solution

Amount : 7840

Solution steps

Translate the problem into an equation:

A = 7000 (1 + \frac{0.12}{1})^{1 \cdot 1}

7000 (1 + \frac{0.12}{1})^{1 \cdot 1} = 7840

Amount : 7840

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