$5000 is deposited in an account that earns 3.2% annual interest. If no funds are added or withdrawn from the account, what will be the account balance in 10 years?
Round to the nearest cent.
To calculate the account balance after 10 years with 3.2% annual interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the account
P = the principal amount (initial deposit) = $5000
r = the annual interest rate = 3.2% or 0.032
n = the number of times interest is compounded per year = 1 (since it is not specified)
t = the number of years = 10
Plugging in the values:
A = $5000(1 + 0.032/1)^(1*10)
A = $5000(1.032)^10
A = $5000(1.432856)
A = $7164.28
Therefore, the account balance after 10 years will be approximately $7164.28.