Question
Fernando has $1,608 in an account. The interest rate is 1% compounded annually.
To the nearest cent, how much will he have in 5 years?
To the nearest cent, how much will he have in 5 years?
Answers
GPT 3.5
To calculate the amount Fernando will have in 5 years, we can use the formula for compound interest:
A = P(1 + r/n)^(n*t)
Where:
A = the final amount
P = the principal amount (initial amount)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years
In this case, Fernando has $1,608 in the account, the interest rate is 1% (or 0.01 as a decimal), the interest is compounded annually (n = 1), and he's keeping the money for 5 years (t = 5).
Plugging the values into the formula:
A = 1608(1 + 0.01/1)^(1*5)
Simplifying the equation:
A = 1608(1 + 0.01)^5
A = 1608(1.01)^5
Using a calculator:
A ≈ 1608(1.0510101)
A ≈ 1697.24
So, to the nearest cent, Fernando will have approximately $1,697.24 in 5 years.
A = P(1 + r/n)^(n*t)
Where:
A = the final amount
P = the principal amount (initial amount)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years
In this case, Fernando has $1,608 in the account, the interest rate is 1% (or 0.01 as a decimal), the interest is compounded annually (n = 1), and he's keeping the money for 5 years (t = 5).
Plugging the values into the formula:
A = 1608(1 + 0.01/1)^(1*5)
Simplifying the equation:
A = 1608(1 + 0.01)^5
A = 1608(1.01)^5
Using a calculator:
A ≈ 1608(1.0510101)
A ≈ 1697.24
So, to the nearest cent, Fernando will have approximately $1,697.24 in 5 years.