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oliver deposits 1,250 into an account that earns an annual interest rate of 3.5%, compound annually. What is the total amount in the account after 5 years?

User Sridhar R
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To find the total amount in the account after 5 years, we can use the formula for compound interest:

A = P(1 + r/n)^(n*t)

where:

A is the total amount after t years

P is the principal amount (initial deposit)

r is the annual interest rate (as a decimal)

n is the number of times the interest is compounded per year

t is the number of years

In this case, we have:

P = 1,250

r = 0.035 (3.5% as a decimal)

n = 1 (compounded annually)

t = 5

So, substituting these values into the formula, we get:

A = 1,250(1 + 0.035/1)^(1*5)

A = 1,250(1.035)^5

A = 1,250(1.1942)

A = 1,492.75

Therefore, the total amount in the account after 5 years is $1,492.75.

User Macno
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