Question

An amount of $29,000 is deposited in a bank that pays interest at the rate of 5%/year, compounded annually. What is the total amount on deposit at the end of 5 years, assuming there are no deposits or withdrawals during those 5 years? (Round your answer to the nearest cent.)

Answer 1

Answer: $37012.17

Explanation:

Accumulated amount after t years : $A= P(1+r)^t$, where P= principal value , r= rate of interest ( in decimal)

As per given, P = $29,000, r= 5% = 0.05, t= 5 years

Accumulated amount : $A=29000(1+0.05)^5$

$\\\\=29000(1.05)^5\\\\=29000(1.2762815625)\approx37012.17$

The total amount on deposit at the end of 5 years = $37012.17