Chen's investment would grow to 44,321 yuan after three years when compounded annually at an interest rate of 3.5%, using the compound interest formula [tex]A = P(1 + r/n)^(nt).[/tex]
To calculate the value of Chen's investment after 3 years with compound interest, we use the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial sum of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
In Chen's case, P = 40,000 yuan, r = 3.5% or 0.035, n = 1 (since the interest is compounded yearly), and t = 3 years. Plugging these values into the formula, we get:
A = 40,000(1 + 0.035/1)^(1*3)
A = 40,000(1 + 0.035)^(3)
A = 40,000(1.035)^3
A = 40,000(1.108025)
A = 44,321 yuan
After compounding annually for three years, Chen's investment would be worth 44,321 yuan to the nearest yuan.
