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Math Help - a different set of questions.

  1. #1
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    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?
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  2. #2
    is up to his old tricks again! Jhevon's Avatar
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    Quote Originally Posted by beli3ve View Post
    $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:

    A = P \left( 1 + \frac {r}{n} \right)^{nt}

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

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