Question

Mykala has deposited $5,000 in a bank for 6 years at the interest rate of 5% compounded annually. How much money will she receive at the end of the six years?Mykala will receive $

Answer 1

Given:

`\begin{gathered} P=\text{ \$}5000 \\ t=6yrs \\ r=5\text{ \%} \end{gathered}`

Using the compound interest formula;

`A=P(1+r)^t`

Hence,

`\begin{gathered} A=5000(1+(5)/(100))^6 \\ A=5000(1.05)^6 \\ A=\text{ \$}6700.48 \end{gathered}`

Therefore, the amount she will receive at the end of six years is $6700.48