Question

Sally deposits $10,000 into an account that pays 4.7% interest compounded yearly. What is the balance after 5 years?

Answer 1

$12,581.53

Explanation:

The balance of an account after having interest compounded annually can be represented using the equation:

`A = P(1 + r)^(t)`

where
`A` is the final balance,
`P` is the principal (starting amount),
`r` is the rate of interest, and
`t` is the number of years that interest is applied.

We can plug the given values into this equation and solve for
`A`.

`P = \$10,000`
`r = 4.7\%`
`t = 5`

`A = 10,000(1 + 4.7\%)^(5)`

`A \approx \$12,581.53`

So, Sally's balance in an account that had $10,000 before being compounded for 5 years at an interest rate of 4.7% is $12,581.53.