Final answer:
Donna deposited $850 in an account that earns 2.9% compound annually. The amount of interest earned is $136.37 and the total value of the account after 60 months is $986.37.
Step-by-step explanation:
To find the amount of interest earned, we need to calculate the interest using the compound interest formula: A = P(1 + r/n)^(nt) - P, where A is the total value of the account, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.
In this case, Donna deposits $850, the interest rate is 2.9% (or 0.029 as a decimal), and it compounds annually. So, P = 850, r = 0.029, n = 1, and t = 60/12 = 5 years (since the interest compounds annually).
Plugging these values into the formula:
A = 850(1 + 0.029/1)^(1*5) - 850
A = 850(1.029)^5 - 850
A = 850(1.1638) - 850
A = $986.37
To find the amount of interest earned, we subtract the principal amount from the total value of the account:
Interest earned = A - P = $986.37 - $850 = $136.37
Therefore, the amount of interest earned is $136.37 and the total value of the account after 60 months is $986.37.