Question

Calculate annually compounded interest
Question
Evelyn placed $2.700 in a savings account which earns 1.1% interest, compounded every year. How much will
she have in the account after 5 years?

Answer 1

Answer:

$2,851.80

Step-by-step explanation:

Lets use the compound interest formula to solve:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 1.1% into a decimal:

1.1% -> $\frac{1.1}{100}$ -> 0.011

Next, plug the values into the equation:

$A=2,700(1+\frac{0.011}{1})^{1(5)}$

$A=2,851.80$

She will have $2,851.80 after 5 years.

Answer 2

Answer:

2852

Step-by-step explanation:

A(t)=P(1+rn)

n⋅t=$2,700(1+0.0111)(5)(1)

             ≈$2,851.80