account at the end of 3 years?
I came up with $3360.00 am I correct?
2006-10-27 08:37:26 · 3 answers · asked by momoftwins1986 1 in Science & Mathematics ➔ Other - Science
Your answer doesn't include compounding. Remember, you have to include the additional interest when you compute the interest the next year. If it wasn't compounded, then you would have $120 each year for a total of $3,360, just like you computed.
However with compounding, the calculation is as follows:
Year 0: $3,000
Year 1: $3,000 * 1.04 = $3,000 + $120 = $3,120
Year 2: $3,120 * 1.04 = $3,120 + $124.80 = $3,244.80
Year 3: $3,244.80 * 1.04 = $3,244.80 + $129.79 = $3,374.59
You can see how compounding gives you a different answer of:
$3,374.59 instead of $3,360.00.
2006-10-27 12:33:22 · answer #1 · answered by Puzzling 7 · 2⤊ 0⤋
it sounds like a hw question, that you should do yourself
2006-10-27 08:44:44 · answer #2 · answered by tryingmybest 2 · 0⤊ 0⤋
3000*1.04*1.04*1.04=3374.59
2006-10-27 08:45:53 · answer #3 · answered by meddlerus 2 · 1⤊ 0⤋