Suppose that 5500 is placed in an account that pays 16% interest compounded each year assume that no withdrawal are made from the account find the amount in the account at the end of 1year

Answer 1

The account will have $6,380.00 after one year.

This question is asking us how much money we will have after one year. To do an investment question, we need to use the following formula: A(t) = a(1 + r)^t, where:

A(t) = amount after time

a = initial value, $5500

r = rate (as a decimal), 0.16

t = amount of time, 1

To begin, let's change the 16% into a decimal by dividing by 100: 16/100 = 0.16

Next, we will get that 1 + 0.16 = 1.16.

Since the initial value for this question is the $5500, we can now write the equation:

A(t) = 5500(1.16)^t

By choosing to find the amount after 1 year, we will let t = 1. so,

A(t) = 5500(1.16)¹= 6380

The account will have $6,380.00 after one year.