Final answer:
To calculate compound interest, use the formula: Total Future Amount = Principal * (1 + Interest Rate)^Time. In this case, the total future amount after 1 year is $5,360.
Step-by-step explanation:
In order to calculate compound interest, we can use the formula:
Total Future Amount = Principal imes (1 + Interest Rate)^Time
Using the given values, the principal amount is $5,000, the interest rate is 7.2%, and the time is 1 year. Plugging these values into the formula, we get:
$5,000 imes (1 + 0.072)^1 = $5,360
Therefore, the total future amount after 1 year is $5,360.