Answered

At Westonci.ca, we make it easy to get the answers you need from a community of informed and experienced contributors. Ask your questions and receive detailed answers from professionals with extensive experience in various fields. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

Molly opened a savings account with a one‐time deposit of $100 that will be left in the account for at least 5 years. The savings account will pay 5% compounded annually. What is the amount of interest she will earn after 5 years.

Sagot :

batolisis

The amount of interest Molly will earn after 5 years on a deposit of [tex]\$100[/tex] compounded annually over 5 years is [tex]\$27.63[/tex]

First, we need to find the future value of her investment, then we subtract the original deposit from it to get the amount of interest she will get at the end of 5 years.

The future value of an investment that is compounded annually is given by

[tex]A=P(1+r)^t[/tex]

where

[tex]A=\text{Amount of money in Molly's account after 5 years}\\P=\text{Molly's initial deposit into her account}=\$500\\r=\text{The annual interest rate as a decimal}=0.05\\t=\text{The time the money is invested (in years)}=5[/tex]

Substituting the available values into the formula and solving

[tex]A=100(1+0.05)^5=100(1.05)^5 \approx \$ 127.63[/tex]

The interest Molly will earn after 5 years is

[tex]A-P=\$127.63-\$100=\$27.63[/tex]

Therefore, the amount of interest Molly will earn after 5 years on a deposit of [tex]\$100[/tex] compounded annually over 5 years is [tex]\$27.63[/tex]

Learn more about compound interest here: https://brainly.com/question/21270833

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for visiting Westonci.ca. Stay informed by coming back for more detailed answers.