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30 December, 18:37

An investor puts $800 in an account that pays 7 % interest, compounded annually. Find the amount in the account after 4 years.

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  1. 30 December, 19:03
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    Answer: the amount in the account after 4 years is $1049

    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 = 800

    r = 7% = 7/100 = 0.07

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

    t = 4 years

    Therefore,

    A = 800 (1+0.07/1) ^1 * 4

    A = 800 (1+0.07) ^4

    A = 800 (1.07) ^4

    A = 1049
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