Question

7. A realtor took $32,500 made on the sale of a home and placed it in a new account that earns

6% compounded annually. Find the total amount in the account after 5 years.

Please help!

Answer 1

Answer: The amount is $43492.35 and the interest is $10992.35.

Explanation:

To find amount we use formula:

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

A = total amount

P = principal or amount of money deposited,

r = annual interest rate

n = number of times compounded per year

t = time in years

In this example we have

P=32,000 , R=6% , N = 1 T= 5 YEARS

After plugging the given information we have

A=32000(1+0.06/1)^1.5

A=32500*1.06^5

A=32500*1.338226

A=$43492.35

To find interest we use formula A=P+I , since A= 43492.35 P =32500 we have:

A=P+I

$43492.35 = 32500+I

I=$43492.35-32500

I=$10992.35