Find the balance in the account, 4,000 principal earning 6% compounded annually after 5 years.
A = P(1+r/n)^nt
A = 4000(1+.06)^5
n = 1 since it is compounded annually.
5352.90
To find the balance in the account after 5 years with a principal of $4,000 and a 6% interest compounded annually, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (initial deposit)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested/borrowed for
In this case:
P = $4,000 (principal)
r = 6% = 0.06 (interest rate expressed as a decimal)
n = 1 (since interest is compounded annually)
t = 5 (number of years)
Plugging in these values, we have:
A = 4,000(1 + 0.06/1)^(1*5)
Simplifying further:
A = 4,000(1 + 0.06)^5
A = 4,000(1.06)^5
A = 4,000(1.3382255776)
A ≈ $5,352.90
So, the balance in the account after 5 years will be approximately $5,352.90.