Answer: 270.58 dollars
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Work Shown:
- A = account value after t years
- P = principal or amount deposited = 800
- r = interest rate in decimal form = 0.06
- n = number of times we compound per year = 1
- t = number of years = 5
So,
A = P*(1+r/n)^(n*t)
A = 800*(1+0.06/1)^(1*5)
A = 1070.58046208
A = 1070.58
After five years, the account will have $1,070.58 in it.
The amount of interest earned is A-P = 1070.58 - 800 = 270.58 dollars.