A credit union client deposits $3,400 in an account earning 9% interest, compounded annually. What will the balance of the account be at the end of 36 years?

Question

Balance $__________  after 36 years.

Answer 1

Given t years, principal P, and annual interest rate r (in decimal form); the balance A for n compounding periods per year follows from this formula:

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

Since t = 36, P=3400, r = 0.09, and n = 1; the balance of the account after 36 years will be

A = 3400(1 + 0.09/1)^(1*36)

= 3400(1.09)^36

= 75654.16511

= $75654.17