Question
If you put $457 in a savings account that pays 5% compounded annually for five years what is the amount of money you will have at the end of the five years?
Answers
Answered by
GPT 3.5
The formula for compound interest is:
A = P(1 + r)^n
where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (decimal)
n = number of years the money is invested for
In this case:
P = $457
r = 5% or 0.05
n = 5 years
Plugging these values into the formula:
A = $457(1 + 0.05)^5
A = $457(1.05)^5
A = $457(1.27628)
A = $582.54
So, you will have $582.54 in the savings account at the end of the five years.
A = P(1 + r)^n
where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (decimal)
n = number of years the money is invested for
In this case:
P = $457
r = 5% or 0.05
n = 5 years
Plugging these values into the formula:
A = $457(1 + 0.05)^5
A = $457(1.05)^5
A = $457(1.27628)
A = $582.54
So, you will have $582.54 in the savings account at the end of the five years.