Suppose Leila places 7500 in an account that pays 11 interest compounded each year. Assume that no withdrawals are made from the account. Follow the instructions below. Do not do any rounding. Find the amount in the account at the end of 1 year.

Solution

S u pp ose L e i l a pl a ces 7500 in an a cco u n t t ha t p a ys 11 in t eres t co m p o u n d e d e a c h ye a r . A ss u m e t ha t n o w i t h d r a w a l s a re ma d e f ro m t h e a cco u n t . F o ll o w t h e in s t r u c t i o n s b e l o w . Do n o t d o an y ro u n d in g . F in d t h e am o u n t in t h e a cco u n t a t t h e e n d o f 1 ye a r .

Amount : 7511

Solution steps

Translate the problem into an equation:

A = 7500 + 11

Simplify

A = 7500 + 11

Amount : 7511