Question

1.How much will $5,000 accumulate in 5 years if it earns 6% per annum for the first 3 years and then 8% per annum for the next 2 years?

Answer 1

Answer: Amount after 5 years become $5937.60.

Explanation:

Since we have given that

Principal amount = $5000

Time period = 5 years

Rate of interest for 3 years = 6%

Rate of interest for 2 years = 8%

so, Amount becomes

`Amount=5000(1+(6)/(1000))^3(1+(8)/(100))^2\\\\Amount=5000(1+0.006)^3(1+0.08)^2\\\\Amount=5000(1.006)^3(1.08)^2\\\\Amount=\$5937.60`

Hence, Amount after 5 years become $5937.60.