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Megan puts $200. 00 into an account to use for school expenses. The account earns 9% interest, compounded annually. How much will be in the account after 5 years?

User Rafalages
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1 Answer

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We can use the formula for compound interest to find the amount in the account after 5 years:

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

where:

A = the amount in the account after 5 years

P = the principal (initial amount) = $200.00

r = the annual interest rate as a decimal = 0.09

n = the number of times the interest is compounded per year = 1 (compounded annually)

t = the time in years = 5

Plugging in the values, we get:

A = $200.00(1 + 0.09/1)^(1*5)

A = $200.00(1.09)^5

A = $200.00(1.538624)

A = $307.72

Therefore, there will be $307.72 in the account after 5 years.

User Kajham
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