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4 years ago Lena won some money in the lottery and put it in a bank account that earns 6% interest compounded annually if Lena currently has $5,000 00 in the bank account how much interest has she earned round your answer to the nearest cent

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Solution

For this case we can use the compound interest formula given by:

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

and for this case A= 5000, r = 0.06, t= 4 and n = 1 ( compounded yearly)

[tex]A=5000(1+\frac{0.06}{1})^{1\cdot4}=6312.38[/tex]

and the interest would be:

[tex]i=6312.38-5000=1312.38[/tex]

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