Question

Peter deposited $5000 in a bank paying 5% interest compounded yearly. Find the balance in his account after 3 years.

Answer 1

$5,788.13

Explanation:

For any amount p , if rate of interest is r% yearly

its value after time t years is given by

value after t years = p(1 + r/100)^t

__________________________________

given

p = $5000

r = 5%

t = 3 year

balance after t years = 5000( 1 + 5/100)^3 = 5000(21/20)3

balance after t years = $5,788.13 (answer)