1. **Stating the problem:** Alexandra invests 4000 into a savings account with compound interest of 3.5% per year. We want to find:
a) The amount of money in the account after 6 years.
b) The interest earned after 6 years.
2. **Formula used:** The compound interest formula is:
$$A = P \left(1 + \frac{r}{100}\right)^t$$
where:
- $A$ is the amount after $t$ years,
- $P$ is the principal (initial amount),
- $r$ is the annual interest rate (in %),
- $t$ is the time in years.
3. **Calculate the amount after 6 years:**
Given $P=4000$, $r=3.5$, $t=6$:
$$A = 4000 \left(1 + \frac{3.5}{100}\right)^6 = 4000 \left(1 + 0.035\right)^6 = 4000 \times 1.035^6$$
Calculate $1.035^6$:
$$1.035^6 \approx 1.23144$$
So:
$$A \approx 4000 \times 1.23144 = 4925.76$$
4. **Calculate the interest earned:**
Interest $I = A - P = 4925.76 - 4000 = 925.76$
5. **Final answers:**
a) Alexandra will have approximately **4925.76** in the account after 6 years.
b) The interest earned after 6 years is approximately **925.76**.
Compound Interest B7885E
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