$3,000 is placed in an account with an annual interest rate of 5.25%. how much will be in the account after…
$3,000 is placed in an account with an annual interest rate of 5.25%. how much will be in the account after 25 years, to the nearest cent?
Answer
Explanation:
Step1: Identify the compound interest formula
$$A = P(1 + r)^{t}$$
Step2: Assign values to the variables
$$P = 3000, r = 0.0525, t = 25$$
Step3: Substitute values into the formula
$$A = 3000(1 + 0.0525)^{25}$$
Step4: Simplify the expression inside parentheses
$$A = 3000(1.0525)^{25}$$
Step5: Calculate the exponentiation result
$$1.0525^{25} \approx 3.593084$$
Step6: Multiply by the principal amount
$$A \approx 3000 \times 3.593084 = 10779.252$$
Step7: Round to the nearest cent
$$A \approx 10779.25$$
Answer:
$10,779.25