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Alex is a personal trainer and deposits 5,000 from his earnings into a savings account that earns 6% annual compound interest. He won’t make any additional deposits or withdrawals for 7 years. How much interest will Alex accrue at the end of 7 years?

Solution

Alex is a personal trainer and deposits 5, 000 from his earnings into a savings account that earns 6% annual compound interest. He won’t make any additional deposits or withdrawals for 7 years. How much interest will Alex accrue at the end of 7 years?

Solution

Interest : 2518.15

Solution steps

Translate the problem into an equation:

7518.15129 \dots = 5000 + I

Solve for

I, 7518.15129 \dots = 5000 + I : I = 2518.15

Interest : 2518.15

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