Suppose that $3000 is placed in an account that pays 16% interest compounded each year. Assume that no withdrawals are made from the account. Follow the instructions below. Do not do any rounding. (a) Find the amount in the account at the end of 1 year. (b) Find the amount in the account at the end of 2 years.

The amount in the account at the end of 1 year is $3,480.

The amount in the account at the end of 2 years is $4,036.80.

The formula that can be used to determine the amount that would be in account after a period of time with annual compounding is:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

Amount in a year = $3000 x (1.16)^1 = $3,480

Amount in two years = $3000 x (1.16)^2 = $4,036.80

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a) $3480

b) $4036.8

Step-by-step explanation:

The compound interest formula is given by:

Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.

Suppose that $3000 is placed in an account that pays 16% interest compounded each year.

This means, respectively, that

So

(a) Find the amount in the account at the end of 1 year.

This is A(1).

(b) Find the amount in the account at the end of 2 years.

This is A(2).

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step-by-step explanation:

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