If you deposit $8,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? Do not round interm

Question

If you deposit $8,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent.

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Rose 1 month 2021-10-16T21:48:55+00:00 2 Answers 0 views 0

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    0
    2021-10-16T21:50:20+00:00

    Answer:

    Step-by-step explanation:

    Assuming the interest was compounded annually, we would apply would apply the formula for determining compound interest which is expressed as

    A = P(1+r/n)^nt

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = 8000

    r = 10% = 10/100 = 0.1

    n = 1 because it was compounded ince in a year.

    t = 5 years

    Therefore,

    A = 8000(1+0.1/1)^1 × 5

    A = 8000(1.1)^5

    A = $12884.1

    0
    2021-10-16T21:50:39+00:00

    Answer:

    $12,884.08

    Step-by-step explanation:

    Assuming that interest is compounded annually, the future value of an invested amount ‘P’, at an interest rate ‘r’ for a period of ‘n’ years is given by the following equation:

    FV = P*(1+r)^n

    Therefore, an investment of $8,000 at a rate of 10% per year for 5 years has a future value of:

    FV = 8,000*(1+0.1)^5\\FV=\$12,884.08

    There will be $12,884.08 in the account after 5 years.

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