Question

PLEASE ANSWER THIS URGENTLY:

Mary deposits £10000 in an account which pays 5.6% compound
interest per year.
How much will Mary have in her account after 5 years?

Answer 1

The amount Mary would have in her account in 5 years is approximately £13,131.7

Explanation:

The amount Mary deposits in the account, P = £10,000

The amount in interest paid by the account, r = 5.6%

The mode by which the interest is calculated = Compound interest

The number of years for which the amount (£10,000) will be kept in the account, t = 5 years

The number of times that the given interest applies per year, n = 1

The amount, "A", Mary would have in her account in 5 years, is given by the compound interest formula as follows;

`A = P \cdot \left ( 1 + (r)/(n) \right ) ^(n \cdot t)`

Where;

A = The amount accrued in the account after the given elapsed periods

P = The principal or initial balance in the account = £10,000

r = The compound interest rate = 5.6/100

n = The number of times the interest is applied in one period of time = 1

t = The sum of the duration for the interest applies = 5

Substituting the given values, we have;

`A = 10,000 * \left ( 1 + (0.056)/(1) \right ) ^(1 * 5) = 13,131.65883211776`

Therefore, the amount Mary would have in her account in 5 years = A ≈ £13,131.7