3400 dollars is placed in an account with an annual interest rate of 7.5%. How much will be in the account after 17 years, to the nearest cent?

Question

Exponential Function

Answer 1

I assume the interest is compounded annually since there is nothing stating to the contrary.

 

A = p(1+r/n)^nt

A = future amount

p = principal = 3400

r = interest rate = 0.075

n = # times compounded per year = 1

t = time in years = 17

 

A = 3400(1+0.075/1)¹⁽¹⁷⁾

A = 3400(1.075)¹⁷

A = $11625.80

 

Note:  If interest is compounded quarterly, n=4

          For semiannually, n=2

          For monthly, n = 12