Question

Suppose you invest $500 at 10% interest, compounded annually. After 5 years, how much money would you have in your account? Remember, the formula is A = P(1 + r)t.

Answer 1

$805.25

Explanation:

Suppose you invest $500 at 10% interest, compounded annually. After 5 years, how much money would you have in your account? Remember, the formula is A = P(1 + r)t.

Given data

Principal= $500

Rate= 10%

Time= 5years

The compound interest expression is

A=P(1+r)^t

substitute

A=500(1+0.1)^5

A=500(1.1)^5

A=500*1.61051

A=$805.25

Hence the account is $805.25