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Alec inherited some money from his grandfather and put it in a bank account that earns 10% interest compounded annually. After 5 years, Alec had 5,000.00 in the bank account. How much interest did he earn?Round your answer to the nearest cent.

Solution

Alec inherited some money from his grandfather and put it in a bank account that earns 10% interest compounded annually. After 5 years, Alec had 5, 000.00 in the bank account. How much interest did he earn?Round your answer to the nearest cent.

Solution

Interest : 1895.39

Solution steps

Translate the problem into an equation:

5000 = 3104.60661 \dots + I

Solve for

I, 5000 = 3104.60661 \dots + I : I = 1895.39

Interest : 1895.39

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