Question

Troy puts $200.00 into an account to use for school expenses. The account earns 7% interest, compounded annually. How much will be in the account after 5 years? Use the formula A=P1+ r n nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years. Round your answer to the nearest cent.

Answer 1

the final amount is = $280.51

Explanation:

The standard formula for compound interest is given as;

A = P(1+r/n)^(nt) .....1

Given that;

Principal P = $200

Interest rate r = 7% = 0.07

Time t = 5 years

Final amount = A

Number of time compounded per year n = 1

Substituting the values;

A = 200(1+0.07/1)^(1×5)

A = 280.51

Therefore, the final amount is = $280.51