Question

Suppose your friend's parents invest $25,000 in an account paying 7% compounded annually. What will the balance be after 5 years?

Answer 1

Given:-

Suppose your friend's parents invest $25,000 in an account paying 7% compounded annually.

To find the balance after 5 years.

So the formula is,

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

So now we substitute the known values. so we get,

`\begin{gathered} A=25000(1+(0.07)/(1))^(1*5) \\ A=25000(1.07)^5 \\ A=25000*1.402 \\ A=25*1402 \\ A=35050 \end{gathered}`

So the final amount is 35050.