Question

Avery deposited $400 in an account that earned 2.47% interest compounded annually. She did not make additional deposits or withdrawals.

What will be the balance in this account at the end of 5 years?

Answer 1

Amount ($451.9), Interest ($51.9)

Explanation:

We need to use the formula of A = P(1 +
`(r)/(n)`)^n*t

A = Total Amount

P = Principle/Deposited money

R = Annual Interest Rate

N = Number of times compounder per year

T = time in years

We have P = $400, r = 2.47%, n = 1 and t = 5 years.

Now lets plug it all in!

`A = 400 (1 + (0.0247)/(1))^(1*5)`

`A = 400 * 1.0247^5`

`A = 400 * 1.129753`

A = 451.9

Now we need to find the interest...

We will use A = P + I since A is 451.9 and P = 400

451.9 = 400 + I

I = 451.9 - 400

I = 51.9