How much is 800 worth after 4 years
using an annual interest rate of 9%
compounded annually?
Calculate Accumulated Balance
A = B(1 + i)n
where A = accumulated balance
B = opening balance
i = Annually interest rate
and n = number of periods
Plugging in our values
A = 800(1 + 0.09)4
A = 800(1.09)4
A = 800(1.41158161)
A = 1,129.27
How much interest was earned?
Interest Earned = Accum. Value - Start Balance
Plug in our values
Interest Earned = 1,129.27 - 0.00
Interest Earned = 1,129.27
1129.27
Final Answer
A = 1,129.27
