A bank offers a 4% annual interest rate for a savings account. Juan puts $5,000 into an account to save for college. How much will be in the account after a year?
5000 * 1.04 = ____
Correct answer is 5,200
thank u
If 40 is increased by 70%, what is the new amount?
To find out how much will be in the account after a year with a 4% annual interest rate, we can use the formula for compound interest. This formula is:
A = P(1 + r/n)^(nt)
Where:
A = the total amount after interest
P = the principal amount (initial deposit)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, Juan deposited $5,000 (P) into the account, with an annual interest rate of 4% (r = 0.04) and we want to find out the amount after 1 year (t = 1). The interest is compounded annually (n = 1).
Plugging these values into the formula, we have:
A = 5000(1 + 0.04/1)^(1*1)
Simplifying the equation:
A = 5000(1 + 0.04)^1
A = 5000(1.04)
A = $5,200
So, after 1 year, there will be $5,200 in the account.