SOLUTION: An account with a balance of $5000 is calculated to earn 2.5% of interest compounded annually. What is the final ‘amount’ of the account balance after 5 years?

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Question 1195745: An account with a balance of
$5000 is calculated to earn
2.5% of interest compounded
annually. What is the final
‘amount’ of the account
balance after 5 years?

Answer by math_tutor2020(3817) About Me  (Show Source):
You can put this solution on YOUR website!

P = deposit = $5000
r = annual interest rate in decimal form = 0.025
n = number of times money is compounded per year = 1
t = number of years = 5

A = P(1+r/n)^(n*t)
A = 5000(1+0.025/1)^(1*5)
A = 5657.04106445312
A = 5657.04 dollars