Final answer:
The balance in the account after five years would be $1,134.09. The amount earned in interest would be $134.09.
Step-by-step explanation:
To find the balance in the account after five years, we can use the formula for compound interest: A = P(1+r/n)^(nt), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, the principal amount is $1,000, the annual interest rate is 2.5%, interest is compounded monthly (n=12), and the duration is five years (t=5). Plugging in these values, we get:
A = 1000(1+0.025/12)^(12*5) = 1000(1.00208)^60 = $1,134.09
Therefore, the balance in the account after five years would be $1,134.09.
To find the amount earned in interest, we can subtract the principal amount from the final amount: $1,134.09 - $1,000 = $134.09.
Therefore, the amount earned in interest would be $134.09.