Find the compound interest on $650 in 5years at 4% per annum
Showing the working
To find the compound interest on $650 in 5 years at 4% per annum, we can use the formula for compound interest:
Compound Interest = Principal Amount * (1 + Interest Rate)^Time - Principal Amount
First, let's find the interest rate in decimal form by dividing the given annual interest rate by 100:
Interest Rate = 4 / 100 = 0.04
Next, let's plug in the values into the formula:
Compound Interest = $650 * (1 + 0.04)^5 - $650
Now, let's calculate the compound interest step by step:
1. Calculate the interest rate with respect to time: (1 + 0.04)^5 = 1.21665
2. Multiply the principal amount with the interest rate: $650 * 1.21665 = $790.22
3. Calculate the compound interest by subtracting the principal amount from the result: $790.22 - $650 = $140.22
Therefore, the compound interest on $650 in 5 years at 4% per annum is $140.22.