Maggie opened a savings account and deposited 1,000.00 as principal. The account earns 5% interest, compounded annually. What is the balance after 5 years?

Solution

Maggie opened a savings account and deposited 1, 000.00 as principal. The account earns 5% interest, compounded annually. What is the balance after 5 years?

Solution

Amount : 1276.28

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.05}{1})^{1 \cdot 5}

1000 (1 + \frac{0.05}{1})^{1 \cdot 5} = 1276.28156 \dots

Round to the nearest hundredth:

1276.28

Amount : 1276.28

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