Actually calculate the final amount on $1000 compounded annually at 6% per year for 4 years.

Answer: the final amount is $1262.5

Step-by-step explanation:

Initial amount in the account is $1000 This means that the principal is

P = 1000

It was compounded annually. This means that it was compounded once in a year. So

n = 1

The rate at which the principal was compounded is 6%. So

r = 6/100 = 0.06

It was compounded for 4 years. So

t = 4

The formula for compound interest is

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

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

A = 1000 (1 + 0.06/1) ^1*4

A = 1000 (1.06) ^4 = $1262.5