Answer : The balance of the account is $8, 245.83
Given that :
Principal (P) = $4000
Rate (r) = 6%
Period (n ) = 5 and it compounded annually
The formula for compound interest is given below
[tex]\begin{gathered} A=P(1+\frac{r}{n})^{n\text{ x t}} \\ \text{Where P = principal, r= rate and n = period} \\ r\text{ = 6\%} \\ r\text{ = }\frac{6}{100} \\ r\text{ = 0.06} \\ A=4000(1+\frac{0.06}{5})^{1\text{ x 5}} \\ A=4000(1+0.012)^5 \\ A=4000x(1.012)^5 \\ A\text{ = 4000 x }1.0615 \\ A\text{ = \$}4,\text{ 245. 83} \end{gathered}[/tex]Hence, the balance of the account is given as
Balance = A + p
Balance = $4, 245.83 + $4, 000
Balance = $8,245.83
