How much will $1000 deposited in an account earning 7% interest compounded annually be worth in 20 years? (which formula do I use? I am confused...txs)

When interest is compounded, it means that both the interest and the amount deposited will earn interest.

We are to determine the future value of $1000 with annual compounding.

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = amount deposited = $1000

R = interest rate = 7%

N = number of years = 20

$1000 x ( 1.07)^20 = $3,869.68

To learn more about compound interest, please check: link

$3870

Step-by-step explanation:

Hello, the initial deposit is $1000.

After one year, we will get 1000 + 7%*1000= 1000 * ( 1+7%) = 1000 * (1+0.07)

= 1000 * 1.07

And we want to compound it so the second year we will get

And after n years, we will get

In that example, we want to know how much we will get after 20 years, so this is:

Thank you.