Three thousand dollars is deposited into a savings account at 3.6% interest comp

Question

Three thousand dollars is deposited into a savings account at 3.6% interest compounded annually. What are the balances after 1, 2, and 3 years? How many years are required for the balance to reach $4, 124.38? After how many years will the balance exceed $5, 700? The balance after year 1 is $ The balance after year 2 is $ (Round to the nearest cent as needed.) The balance after year 3 is $ (Round to the nearest cent as needed.) The time for the present value to reach $4, 124.38 is years. The present value will exceed $5, 700 in years.

Explanation / Answer

Amount = Principal(1 +rate/100)^years

After 1 year

= 3000(1+ 3.6/100)^1 = $3108

After 2 year

= 3000(1+ 3.6/100)^2 = 3219.888 = $3219.88

After 3 year

= 3000(1+ 3.6/100)^3 = $ 3335.80

Time for value to reach $ 4124.38

4124.38 = 3000(1+ 3.6/100)^n

n = 9 years

5700 > 3000(1+ 3.6/100)^n

n< 18.15

n = 18 years

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