Question

Russom deposits $500 into a compound interest account. The interest rate for the

account is 3.25%. Determine the account balance after 5 years.

Answer 1

$581.25

Explanation:

First, converting R percent to r a decimal

r = R/100 = 3.25%/100 = 0.0325 per year,

then, solving our equation

I = 500 × 0.0325 × 5 = 81.25

I = $ 81.25

The simple interest accumulated

on a principal of $ 500.00

at a rate of 3.25% per year

for 5 years is $ 81.25.