jared opened a savings account exactly 5 years ago. the account earns 4% interest compounded annually. the…

Answer:

$1094.55$

Explanation:

Step1: Recall compound - interest formula

$A = P(1 + r)^n$, where $A$ is the final amount, $P$ is the principal amount, $r$ is the annual interest rate (as a decimal), and $n$ is the number of years. We know that $A = 1200$, $r=0.04$, and $n = 5$. First, we find the initial amount $P$. $1200=P(1 + 0.04)^5$ $P=\frac{1200}{(1.04)^5}$

Step2: Calculate the initial amount $P$

$(1.04)^5=1.04\times1.04\times1.04\times1.04\times1.04 = 1.2166529024$ $P=\frac{1200}{1.2166529024}\approx986.30$

Step3: Find the amount after 3 years

Now we use the formula $A = P(1 + r)^n$ again, with $P\approx986.30$, $r = 0.04$, and $n = 3$. $A=986.30\times(1.04)^3$ $(1.04)^3=1.04\times1.04\times1.04 = 1.124864$ $A=986.30\times1.124864\approx1094.55$