Question
7 Jenny invests \( \$ 8500 \) for 3 years in a savings account.
She gets \( 2.3 \% \) per year compound interest.
(a) How much money will Jenny have in her savi

7 Jenny invests \( \$ 8500 \) for 3 years in a savings account. She gets \( 2.3 \% \) per year compound interest. (a) How much money will Jenny have in her savings account at the end of 3 years? Give your answer correct to the nearest dollar.

Ask by Gough Erickson.
Nov 17,2024 19:00

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Answer

Jenny will have approximately $9100 in her savings account at the end of 3 years.

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The Deep Dive

To calculate the amount Jenny will have in her savings account after 3 years with compound interest, we can use the formula for compound interest: \[ A = P(1 + r)^n \] where: - \( A \) is the amount of money accumulated after n years, including interest, - \( P \) is the principal amount (the initial amount of money), - \( r \) is the annual interest rate (decimal), and - \( n \) is the number of years the money is invested or borrowed. Here, \( P = 8500 \), \( r = 2.3\% = 0.023 \), and \( n = 3 \). Plugging in these values: \[ A = 8500(1 + 0.023)^3 \] \[ A = 8500(1.023)^3 \] \[ A ≈ 8500(1.070144) \] \[ A ≈ 9096.73 \] Rounded to the nearest dollar, Jenny will have approximately \( \$9097 \) in her savings account at the end of 3 years.

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