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Popular Word Problems >

If 10,000 is invested at 6% annual interest compounded yearly, what is the account balance after 4 years, assuming no additional deposits or withdrawals are made?

Solution

I f 10, 000 i s in v es t e d a t 6% ann u a l in t eres t co m p o u n d e d ye a r l y, w ha t i s t h e a cco u n t ba l an ce a f t er 4 ye a rs, a ss u min g n o a dd i t i o na l d e p os i t s or w i t h d r a w a l s a re ma d e ?

Solution

Amount : 12624.77

Solution steps

Translate the problem into an equation:

A = 10000 (1 + \frac{0.06}{1})^{1 \cdot 4}

10000 (1 + \frac{0.06}{1})^{1 \cdot 4} = 12624.7696

Round to the nearest hundredth:

12624.77

Amount : 12624.77

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