Question

Esther deposited $5,000 into an account that grows at a rate of 8% per year. To the nearest cent, how much will be in the

account after 5 years?

Answer 1

The total amount after five years = $7,000

Explanation:

Step(i):-

Given Esther deposited $5,000 into an account

Principal amount 'P' = 5000

Given rate of interest (R) = 8%

r = R / 100 = 0.08 per year

Step(ii):-

The total amount after 5 years

`A = P( 1 + r t )`

`A = 5000(1+ (0.08 X 5) = 7000`

Final answer:-

The total amount after five years = $7,000