SOLUTION: if $1,00 is deposited in a bank account that pays 4% interest compounded annually, what is the balance of the account after 5 years

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Question 202380: if $1,00 is deposited in a bank account that pays 4% interest compounded annually, what is the balance of the account after 5 years
Answer by dyakobovitch(40)   (Show Source): You can put this solution on YOUR website!
The formula for compounded annual interest is A=P(1+r)^t, with A= final amount, P= principal initial deposit, r= interest rate as a percent, and t= time in years.
So, we know that P=1, r=.04, and t= 5.
Substiuting in these values, we have A=1(1+.04)^5=
Solved by pluggable solver: EXPLAIN simplification of an expression
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  • Graphical form: simplifies to
  • Text form: 1*(1+.04)^5 simplifies to 1.2166529024
  • Cartoon (animation) form:
    For tutors: simplify_cartoon( 1*(1+.04)^5 )
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DETAILED EXPLANATION

Look at .
Remove extraneous '1' from product highlight_red%28+1+%29
It becomes .
Look at .
Replace constants in expression: highlight_red%28+1+%29,highlight_red%28+.04+%29 with highlight_green%28+1.04+%29
It becomes .
Look at .
Replace constants in factor: highlight_red%28+%281.04%29+%29,highlight_red%28+5+%29 with highlight_green%28+1.2166529024+%29
It becomes .
Result:

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Done!
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