Thread: Compounded Intrest?

You deposit $4000 in an account that pays 9% interest compounded yearly.
Find the balance after 15 years.

I used this formula:
y = C(1 + r)^15

So I substitute:
y = (4000)(1 + .09)^15
y = (4000)(1.09)^15

Do I multiply the first two numbers before doing the power? Or do I do 1.09^15 first?

Originally Posted by SarynJumail

You deposit $4000 in an account that pays 9% interest compounded yearly.
Find the balance after 15 years.

I used this formula:
y = C(1 + r)^15

So I substitute:
y = (4000)(1 + .09)^15
y = (4000)(1.09)^15

Do I multiply the first two numbers before doing the power? Or do I do 1.09^15 first?

You multiply it by 1.09 for every year that it gets interest.

So it's 4000 * 1.09 * 1.09 * 1.09...

You do the power first otherwise you're doing (4000 * 1.09) * (4000 * 1.09) * (4000 * 1.09)... Which is wrong.

Okay....so I do the exponent before the multiplication...I wasn't sure because it was outside the ()...
But I get it now, thanks.

Originally Posted by SarynJumail

You deposit $4000 in an account that pays 9% interest compounded yearly.
Find the balance after 15 years.

I used this formula:
y = C(1 + r)^15

So I substitute:
y = (4000)(1 + .09)^15
y = (4000)(1.09)^15

Do I multiply the first two numbers before doing the power? Or do I do 1.09^15 first?

Do first, then multiply by 4000.

w00t!!! this is my 1th Post!!

Originally Posted by SarynJumail

Okay....so I do the exponent before the multiplication...I wasn't sure because it was outside the ()...
But I get it now, thanks.

But the 4000 is also outside of the brackets of the 1.09. It's the things INSIDE each set of brackets you do first, not the things next to them. Then indices, division, multiplication, addition and subtraction...

You seem to have studied the Order of Operations.

4000*1.09^15 is not ambiguous.

4000*(1.09^15) is the same.

4000*(1.09)^15 is the same.

4000*((1.09)^15) is the same.

(4000)*((1.09)^15) is the same.

(4000*1.09)^15 is NOT the same.