Question

At the beginning of 2009 Marilyn invested $5000 in a savings account account pays 4% interest per year at the end of the year at the interest is paid how much does Marilyn have in the account?

Answer 1

$5200

Explanation:

Given :

Amount invested, Principal, P = $5000

Interest rate, r = 4% = 4/100 = 0.04

Amount in account at the end of the year, A

period, t = 1 year

Using the relation :

A = P(1 + rt)

A = $5000(1 + 0.04*1)

A = $5000(1 + 0.04)

A = $5000 * 1.04

Amount in account at year end = $5200