# RE4 | mistralai/mistral-small-2603 | run 1

## Prompt

You deposit $1,000 at 5% interest compounded annually. What is the balance after 3 years? Round to the nearest cent and show your work.

## Response

After 3 years, the balance will be $1,157.63.

Future value = \( 1,000 × (1 + 0.05)^3 \)
Future value = \( 1,000 × 1.157625 \)
Future value = $1,157.625 ≈ $1,157.63

Check calculation:
Year 1: $1,000 × 1.05 = $1,050
Year 2: $1,050 × 1.05 = $1,102.50
Year 3: $1,102.50 × 1.05 = $1,157.63

Which method would you prefer to use when calculating compound interest: the formula or step-by-step iteration?
