If you deposit $5000 into an account paying 8.25% interest compounded annually, how much money will be in your account in 5 years?
To calculate the future value of the account after 5 years at an annual interest rate of 8.25% compounded annually, you can use the formula for compound interest:
FV = PV(1 + r)^t
Where:
FV = future value of the account
PV = initial deposit amount ($5000)
r = annual interest rate (8.25% or 0.0825)
t = number of years (5 years)
Plugging in the values, we get:
FV = $5000(1 + 0.0825)^5
FV = $5000(1.0825)^5
FV = $5000(1.477455)
FV = $7387.27
Therefore, the amount of money in the account after 5 years will be $7387.27.