1. Actually calculate the final amount on $1000 compounded annually at 6% per year for 4 years?

Answer:1262.5

Step-by-step explanation:

A=amount p=principal r=rate n=time in years

A=p (1+r/100) ^n

A=1000 (1+6/100) ^4

A=1000 (1+0.06) ^4

A=1000 (1.06) ^4

A=1000*1.2625

A=1262.5

Answer:the final amount is $1263

Step-by-step explanation:

Initial amount deposited into the account is $1000 This means that the principal is

P = 1000

It was compounded annually. This means that it was compounded once in a year. So

n = 1

The rate at which the principal was compounded is 6%. So

r = 6/100 = 0.06

It was compounded for 4 years. So

t = 4

The formula for compound interest is

A = P (1+r/n) ^nt

A = total amount in the account at the end of t years. Therefore

A = 1000 (1+0.06/1) ^1*4

A = 1000 (1.06) ^4

A = $1263