Question

a savings account starts with $1,000 and earns 4% interest, compounded annually. what is the balance after 3 years? annual compound interest formula a = p(1 + r)^t a = $?

Explanation:

Step1: Identify values

$P = 1000$, $r = 0.04$, $t = 3$

Step2: Apply compound interest formula

$A = P(1 + r)^t = 1000(1 + 0.04)^3$

Step3: Calculate $(1 + 0.04)^3$

$(1.04)^3 = 1.04\times1.04\times1.04 = 1.124864$

Step4: Multiply by P

$A = 1000\times1.124864 = 1124.864$

Answer:

1124.86 (or 1124.864 depending on precision, usually rounded to two decimal places for currency)