Math Problem Statement
Maye invests 5200 euros in a savings account for 4 years. She gets 2.5% per year compound interest. Work out how much Maye will have in the account after 4 years.
Solution
To calculate the amount in the account after 4 years with compound interest, we use the formula:
where:
- = the amount of money accumulated after n years, including interest.
- = principal amount (initial investment).
- = annual interest rate (decimal).
- = number of times that interest is compounded per year.
- = number of years the money is invested.
Given:
- euros
- (2.5% as a decimal)
- (interest is compounded annually)
- years
Now plug in the values:
So, Maye will have approximately 5739.42 euros in the account after 4 years.
Do you want details or have any questions? Here are some related questions to consider:
- How would the amount change if the interest rate were higher?
- What would the total be after 10 years at the same interest rate?
- How much interest did Maye earn in total over the 4 years?
- If Maye added an extra amount each year, how would that affect the total?
- What is the difference between simple and compound interest in this scenario?
Tip: Always consider how frequently interest is compounded, as it can significantly impact the total amount accumulated over time.
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Math Problem Analysis
Mathematical Concepts
Compound Interest
Exponential Growth
Formulas
A = P(1 + r/n)^(nt)
Theorems
-
Suitable Grade Level
Grades 9-11
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