Question

You have $5,000 to invest for ten years. Crown of The Sun bank pays compound interest at an annual rate of 4.5%. Calculate your balance after 10 years. Round to the nearest hundreth

Answer 1

Answer: $7,764.85

Explanation:

Use the formula for Compound Interest: CI = P(1 + r/n)^nt

CI = 5000(1 + 0.045/1)^10

CI = 5000(1.045)^10

CI ≅ $7,764.85

After 10 years, the balance should be $7,764.85

Answer 2

$7764.85

Explanation:

Assume the compounding is annual.

F = P(1 + r/n)^(nt)

F = 5000(1 + 0.045/1)^10

F = 7764.85

Answer: $7764.85