Jenna put 4,000 in a retirement account that offers 7% interest compounded annually. She makes no additional deposits or withdrawals. How much interest will she have earned at the end of 5 years?

Solution

Jenna put 4, 000 in a retirement account that offers 7% interest compounded annually. She makes no additional deposits or withdrawals. How much interest will she have earned at the end of 5 years?

Solution

Interest : 1610.21

Solution steps

Translate the problem into an equation:

5610.20692 \dots = 4000 + I

Solve for

I, 5610.20692 \dots = 4000 + I : I = 1610.21

Interest : 1610.21

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