Question

use the appropriate compound interest formula to find the amount that will be in each account given the stated conditions.$45,000 invested at 5% annual interest for 7 years compounded (a) annually, (b) semiannually.

Answer 1

The equation for the compound interest is:

$Y=45000(1+0.05)^7$

So we operate:

$\begin{gathered} Y=45000(1.05)^7 \\ Y=63319.519 \end{gathered}$

So at the end of the 7 years you will have $63,319.519 dollars