# Thread: a different set of questions.

1. ## 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? 2. 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:

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

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