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24 March, 17:23

Paula opened a savings account and deposited $700 as a principal the account earns 8% interest compounded annually what is the balance after three years

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  1. 24 March, 17:40
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    Answer: the balance after three years is $882

    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

    A = P (1 + r/n) ^nt

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $700

    r = 8% = 8/100 = 0.08

    n = 1 because it was compounded once in a year.

    t = 3 years

    Therefore,

    A = 700 (1 + 0.08/1) ^1 * 3

    A = 700 (1.08) ^3

    A = $882
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