enrique opened an account that earns 2.1% interest compounded annually to save for college. he invested…

enrique opened an account that earns 2.1% interest compounded annually to save for college. he invested $3,500 and doesnt deposit or withdraw money from the account. what will be the balance in the account after 4 years? round your answer to the nearest cent.

enrique opened an account that earns 2.1% interest compounded annually to save for college. he invested $3,500 and doesnt deposit or withdraw money from the account. what will be the balance in the account after 4 years? round your answer to the nearest cent.

Answer

Explanation:

Step1: Identify compound - interest formula

The compound - interest formula is $A = P(1 + r)^t$, where $A$ is the final amount, $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the number of years.

Step2: Convert the interest rate to decimal

Given $r = 2.1%=0.021$, $P=$3500$, and $t = 4$.

Step3: Substitute values into the formula

$A=3500\times(1 + 0.021)^4$. First, calculate $(1 + 0.021)^4=(1.021)^4$. $(1.021)^4=1.021\times1.021\times1.021\times1.021\approx1.086599$. Then, $A = 3500\times1.086599\approx3803.0965$.

Step4: Round to the nearest cent

Rounding $3803.0965$ to the nearest cent gives $3803.10$.

Answer:

$3803.10$