Question

Find the balance in the account after the given period. $4000 principal earning 6% compounded annually, after 5 yr

Answer 1

A = P(1+r/n)^nt

A = 4000(1+.06)^5

n = 1 since it is compounded annually.

Answer 2

The balance in the account after the given period is
`\$5,352.90`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=5\ years\\ P=\$4,000\\ r=0.06\\n=1`

substitute in the formula above

`A=\$4,000(1+(0.06)/(1))^(1*5)=\$5,352.90`