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1. You deposit $250 in a new savings account paying 3% interest compounded annually.
If the account is left alone, how much money will be in the account at the end of 5
years? *

Respuesta :

qop

Answer:

$289.82

Step-by-step explanation:

Lets use the compound interest formula to solve:

[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

Our first step is to change 3% into a decimal:

3% -> [tex]\frac{3}{100}[/tex] -> 0.03

Now, lets plug the values into the equation:

[tex]A=250(1+\frac{0.03}{1})^{1(5)}[/tex]

[tex]A=289.82[/tex]

The account balance after 5 years will be $289.82