Question

If you deposit $10,000 in an account that pays 4.2% interest compounded annually, how much

will your balance be after 5 years?

Answer 1

12,100

Explanation:

Deposit: $10,000

Interest: 4.2%

Time: 5 years

First you change the percent into a decimal, which is 4.2% = 0.042. The equation is ((10,000 * 0.42) 5) + 10,000 = x. Heres how you simplify it:

((10,000 * 0.42) 5) + 10,000 = x

(420* 5) + 10,000 = x

2,100 + 10,000 = x

12,100 = x

Answer: 12,100 is the balance after 5 years.