Wendy opened a savings account and deposited 4,000.00 as principal. The account earns 12% interest, compounded annually. What is the balance after 5 years?

Solution

Wendy opened a savings account and deposited 4, 000.00 as principal. The account earns 12% interest, compounded annually. What is the balance after 5 years?

Solution

Amount : 7049.37

Solution steps

Translate the problem into an equation:

A = 4000 (1 + \frac{0.12}{1})^{1 \cdot 5}

4000 (1 + \frac{0.12}{1})^{1 \cdot 5} = 7049.36673 \dots

Round to the nearest hundredth:

7049.37

Amount : 7049.37

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