Kinsley opened a savings account and deposited 400.00 as principal. The account earns 12% interest, compounded annually. What is the balance after 5 years?Round your answer to the nearest cent.

Solution

Solution

Amount : 704.94

Solution steps

Translate the problem into an equation:

A = 400 (1 + \frac{0.12}{1})^{1 \cdot 5}

400 (1 + \frac{0.12}{1})^{1 \cdot 5} = 704.93667 \dots

Round to the nearest hundredth:

704.94

Amount : 704.94

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