Word problem

Question

If $1100 dollars is deposited in an account paying 8 percent annual interest, approximate the amount in the account after 16 years

Answer 1

If we assume compound interest, then the value of $1,100 16 years in the future, assuming that the account earns 8% per year and is compounded annually is

 

Future Value = Present Value * (1 + r)ⁿ = $1,100 * (1.08)¹⁶ = $1,100 * 3.425943 = $3,768.54

Answer 2

8 per hundred (per cent) of 1100 is 88

16 times 88 is about 15 times 90, that is about 1350