A man placed $11500 in a fixed deposit for 5 years at 8% per annum. Calculate the total amount received at the end of the period under compound interest.
16897.27
What is
11500(1.08)^5 ?
To calculate the total amount received at the end of the 5-year fixed deposit with compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = Total amount received at the end of the period
P = Principal amount (initial deposit) = $11500
r = Annual interest rate (in decimal form) = 8% = 0.08
n = Number of times interest is compounded per year (assuming annually in this case)
t = Number of years
Plugging in the values into the formula:
A = $11500(1 + 0.08/1)^(1*5)
Simplifying the formula:
A = $11500(1 + 0.08)^5
Calculating:
A = $11500(1.08)^5
A ≈ $11500(1.46933)
A ≈ $16885.45
Therefore, the total amount received at the end of the 5-year fixed deposit under compound interest is approximately $16885.45.
To calculate the total amount received at the end of the period under compound interest, you can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the total amount received at the end of the period
P = the principal amount (initial deposit) = $11500
r = the annual interest rate (in decimal form) = 8% = 0.08
n = the number of times interest is compounded per year (annually in this case) = 1
t = the number of years = 5
Plugging in the values into the formula:
A = 11500(1 + 0.08/1)^(1*5)
A = 11500(1 + 0.08)^5
A = 11500(1.08)^5
A = 11500(1.4693)
A ≈ $16,892.95
Therefore, the total amount received at the end of the period under compound interest would be approximately $16,892.95.