Question

Virgil opened an account with a deposit of $815.

. The bank pays 5% interest compounded annually on this account.
• Virgil makes no additional deposits or withdrawals.
How much interest will the account have earned after 6.5 years?

Answer 1

$304.15

Explanation:

The amount of interest earned can be found from the formula ...

I = P((1 +r)^t -1)

I = $815((1 +0.05)^6.5 -1) ≈ $815(0.373189) ≈ $304.15

Virgil's account will have earned about $304.15 in interest in 6.5 years.