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Looking at the question, the answer gotten is:$4316.55. The question is related to compound interest.
Compound interest is known to be the interest that is earned on a principal sum in addition to the accumulated interest previously. It is as a result of reinvesting interest.
To find the compound interest, the formula used is:
A= P(1+r/n)^nt.
Where
P is the principal sum= $3500
r is the rate = 0.035
n is the compounding period = 12 months.
t is the time = 6 years.
Substituting them in the equation, we have:
A = 3500 ( 1 + 0.035/12)^12×6
Working out the one in the bracket and multiplying the exponent, we have:
A = 3500 (1.00291667)^72
Note: We got 72 by multiplying 12 by 6.
1.00291667 raised to the power of 72 = 1.23330133
A = 3500× 1.23330133 = $4,316.55
Ans: $4,316.55
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