How do I solve this problem using compound interest?

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Answer 1 · 2018-05-12T01:53:51

Use the compound interest formula below.

The compound interest formula is as follows:

#A = P(1+r/n)^(nt)#

Where:
#A=# Accumulated amount
#P=# Principal Amount
#r=# Annual interest rate
#n=# Number of compoundings per year
#t=# Number of years.

Example 1.

#A= 27000(1+0.035/12)^(12 xx 3)#

Because: #3.5% = 0.035#, #n=12# (months in a year), #t=3# years

#A approx 27000(1.002917)^36#

#approx 27000 xx 1.110541#

#=$29,984.60#

The remaining 3 examples use the same formula, results below.

#2: $30,894.69#

#3: $32,310.37#

#4: $34,811.16#