You deposit all of your graduation money, $2,560, into an account earning 3.5% interest, compounded annually. You want to let it sit, no deposits or withdraws, while you are in college for 4 years. How much will you have at the end of 4 years? Round to the nearest cent.

To calculate the amount of money you'll have after 4 years, we can use the formula for compound interest:

\[
A = P \left(1 + \frac{r}{n}\right)^{nt}
\]

Where:
- $A$ is the amount of money accumulated after $t$ years, including interest.
- $P$ is the principal amount (the initial deposit), which is $2,560.
- $r$ is the annual interest rate (in decimal), which is 3.5%, or 0.035.
- $n$ is the number of times the interest is compounded per year. Since it is compounded annually, $n = 1$.
- $t$ is the number of years the money is invested, which is 4 years.

Substituting the values into the formula:

\[
A = 2560 \left(1 + \frac{0.035}{1}\right)^{1 \times 4}
\]

Let me calculate that for you.After 4 years, your account will have approximately **$2,937.66**.

Would you like further details or have any questions about the calculation? Here are 5 related questions to think about:

1. What if the interest were compounded monthly instead of annually?
2. How would the total amount change if you left the money for 5 years instead of 4?
3. What would be the future value if the interest rate were 5% instead of 3.5%?
4. How does simple interest compare to compound interest for the same values?
5. What if you made annual deposits to the account?

**Tip**: Compound interest grows faster when it's compounded more frequently (e.g., monthly instead of annually).

Discover how much you'll have after 4 years with a $2,560 deposit earning 3.5% annual interest compounded yearly. Learn the compound interest formula, including a step-by-step calculation to find the total amount of $2,937.66. Suitable for students in Grades 9-12.

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