Kirsten invested $1000 in an account at an annual interest rate of 3%. She made no deposits or withdrawals on the account for 5 years. How do you find the balance in the account, to the nearest cent, at the end of 5 years?

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The interest was compounded annually.

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Answer 1 · 2018-08-06T15:36:02

Amount Kirsten had after five years $A = $ 1159.27$ $color(violet)(A = $1159.27$

It’s Compound Interest.

$P = $ 1000, R = 3 %, N = 5$ $P = $1000, R=3%, N = 5$ years, $A = ?$ $A = ?$

Amount $A = P {(1 + \frac{R}{100})}$ $A = P (1 + R/100)^$

$A = 1000 \cdot {(1 + \frac{3}{100})}^{5}$ $A = 1000* (1+ 3/100)^5$

$A = 1000 \cdot {1.03}^{5}$ $A = 1000 * 1.03^5$

Amount Kirsten had after five years $A = $ 1159.27$ $color(violet)(A = $1159.27$