SOLUTION: 7000 in bank account at 4.5% interest compounded annually how much money will be in the account after 6 years

Question 459561: 7000 in bank account at 4.5% interest compounded annually how much money will be in the account after 6 years
Answer by Jstrasner(112) (Show Source): You can put this solution on YOUR website!
Hey,
So compound interest means that every year,, interest is made off of the money in the bank regardless if it has increased because of previous interest. This may be confusing so here is the problem:
1st year:
7000 x .045 = 315
so at the end of the first year there is $7315 in the bank.
2nd year:
7315 x .045 = 329.175
so at the end of the second year there is $7644.175 in the bank.
3rd year:
7664.175 x .045 = 343.987875
so at the end of the third year there is $8008.162875 in the bank.
4th year:
8008.162875 x .045 = 360.367329375
so at the end of the fourth year there is $8368.530204375 in the bank.
5th year:
8368.530204375 x .045 = 376.583859196875
so at the end of the fifth year there is $8745.114063571875 in the bank.
6th year:
8745.114063571875 x .045 = 393.530132860734375
So at the end of 6 years there is $9138.644196432609375 in the account.
you should probably simplify the answer:
$ 9138.64
I hope this help!
RELATED QUESTIONS
How much money will be in a bank account after 4 years if $9 is deposited at an interest... (answered by jorel1380)

You invest $2,000 in an account that is compounded annually at an interest rate of 5%.... (answered by josgarithmetic)

how much money will there be in an account at the end of 9 years is $7000 is deposited at (answered by rfer)

4. You are planning to deposit $15,000 into a bank account at the end of each year for 5... (answered by Theo)

Latifah opens a bank account with $800. The account accrues 6% interest compounded... (answered by jim_thompson5910)

Latifah opens a bank account with $800. The account accrues 6% interest compounded... (answered by rfer)

If you deposit $1,000 in your bank account, how much will be in the account After 6 years (answered by Boreal)

If you deposit $1,000 in your bank account, how much will be in the account After 5... (answered by Edwin McCravy)