Question

You deposit $2700 in an account that pays 3% annual interest compounded weekly. How much money is in the account after 5 years?

Answer 1

A = $3136.86

Explanation:

Given the following data;

Principal = $2700

Interest rate = 3% = 3/100 = 0.03

Number of times = 52

Time = 5 years

To find the future value, we would use the compound interest formula;

`A = P(1 + (r)/(n))^(nt)`

Where;

A is the future value.

P is the principal or starting amount.

r is annual interest rate.

n is the number of times the interest is compounded in a year.

t is the number of years for the compound interest.

Substituting into the equation, we have;

`A = 2700(1 + (0.03)/(52))^(52*5)`

`A = 2700(1 + 0.0005769)^(260)`

`A = 2700(1.0005769)^(260)`

`A = 2700(1.1618)`

A = $3136.86