Question

You receive a bonus at work for $5,000. You decide to invest in a bank account for 5 years. The bank gives you a 2.45% interest rate. Determine the amount of money that will be in the account if the interest is compounded

Answer 1

Answer:

5000(1+0.0245) raise to 5

$5643.26

Step-by-step explanation:

Answer 2

The amount of money that will received after 5 years is $5643.256

Compound Interest

The compound interest of a primary money P with rate of interest r for time t is the total money that include interest and primary as well and can be calculated with the formula

$A=P(1+\frac{r}{100})^t$

Solution

Here we have given

Primary money = P = $5000

Rate of interest = r = 2.45 %

Time = 5 year

Substitute these values into above formula and we get

$A=5000(1+\frac{2.45}{100})^5$

$A=5000(1.0245)^5$

A = $5643.256

Therefore the total amount that will received after 5 year is $5643.256

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