Question

Brendan deposited $3,967 in an account earning 5% interest compounded annually.

To the nearest cent, how much interest will he earn in 5 years?

pls it’s urgent

Answer 1

• $1096.01

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Given:

• Deposit P = $3967,
• Interest rate r = 5% = 0.05,
• Time t = 5 years,
• Number of compounds n = 1.

Find the total amount after 5 years:

• 
  `A = P(1 + r/n)^(nt)`
• 
  `A = 3967(1+0.05/1)^(5*1)=3967(1.05)^5=5063.01\ rounded`

Find the amount of interest:

• I = A - P
• I = 5063.01 - 3967 = 1096.01