Westonci.ca makes finding answers easy, with a community of experts ready to provide you with the information you seek. Explore our Q&A platform to find reliable answers from a wide range of experts in different fields. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A 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 :

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 visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.