Thread: a different set of questions.

$6000 is invested at an annual rate of 7% and compounded annually. Find the balance after five years.

This seems like an elementary question to me, but I am unsure how to find the answer.
I would typically multiple 6000 times 7 percent then multiple it times five and add that to the 6000. I come up with 8100, which isn't any of the offered answers.

Help?

Originally Posted by beli3ve

$6000 is invested at an annual rate of 7% and compounded annually. Find the balance after five years.

This seems like an elementary question to me, but I am unsure how to find the answer.
I would typically multiple 6000 times 7 percent then multiple it times five and add that to the 6000. I come up with 8100, which isn't any of the offered answers.

Help?

the formula for compound interest is the following:



where is the amount of money we have after time , is the principal amount, that is, the original amount we invested, is the rate of interest written as a decimal (so for 7% it would be 0.07), is the number of interest periods, and is the time we invested it for

so just use that formula and you will get the right answer